Alabama is betting a stake in its economic future on one of its oldest industries.
Coal has long been a staple of the state’s economy and could continue to be as state and private sector partners move to phase out mining coal for power generation and raise production of the type of coal needed for steel manufacturing.
Metallurgical coal is a necessary ingredient in steel production and has long been king in Alabama, making up a majority of its accessible deposits and exports, most of which are headed to overseas customers in Europe and China today.
There is no “clean energy alternative” available to replace metallurgical coal’s role in making steel according to a report by the International Energy Association, and without a clear, scalable candidate on the horizon, “efficient use of materials and energy, alongside with some fuel switching” remain “the best ways to reduce emissions in the industry sector,” for the foreseeable future.
With global steel production is expected to increase, Patrick Cagle, president of the Alabama Mining Association, the industry trade association, said he thinks Alabama’s mining industry is here to stay.
While demand for thermal coal, the type used in electric power stations, is waning under a flurry of green initiatives and well-priced fossil fuel alternatives like natural gas, metallurgical coal sales have proven resilient because its fortunes are largely tied to the ebbs and flows of global construction rates instead, a nuance long-term predictions spelling the industry’s demise don’t take into account, Cagle added.
“That coal’s different,” he said. “Alabama’s coal industry is going the opposite direction of thermal coal markets and that’ll continue because the futures already in metallurgical coal in Alabama.”
In Alabama, metallurgical coal is making up a growing portion of its energy exports, representing a record 82% of its mined coal in 2022. In 2021, as market trends around coal reversed due to an increased demand for electricity use during the pandemic and the U.S. mined more than it had in recent years, the Port of Mobile, Alabama’s largest commercial port, became the nation’s top exporter of domestic coal.
The port is currently undergoing a state backed $45 million, seven-year capital improvement project that would expand metallurgical coal shipping capacity while reducing thermal coal’s to nothing, said Maggie Oliver, vice-president of communications for the Alabama Port Authority, which governs the port.
As the demand for metallurgical coal “skyrockets” and investments in thermal coal “fade away,” the port is now installing new equipment and upgrading surrounding infrastructure to double its metallurgical coal shipping capacity from its current rate of 11 million tons annually, Oliver said, with officials expecting to be completely divested from thermal coal operations potentially as soon as the end of the year.
Alabama’s government awarded an additional $25 million in funds to the port project to outfit the berths to receive larger cargo vessels. State officials have also leveraged incentives and other support across a wide array of smaller projects to support the industry’s growth, including a recent announcement of $2.5 million in state fund for the improvement of roads around the Shoal Creek Mine in Jefferson County.
Private investments have also flow in to Alabama mines.
The state’s largest mining company, Warrior Met Coal, wants to spend upwards of $700 million over the next five years to expand mining operations on federal land in Tuscaloosa County. The plan would to boost the company’s total production capacity by 60% and extend the life of its metallurgical coal mine by 50 years, said the company.
Warrior Met is currently waiting on federal permit approval to begin the project.
Last week, one of Alabama’s U.S. senators, Katie Britt, a Republican, urged federal officials in a hearing to speed approval of those permits, calling Warrior Met “an important economic driver in the state of Alabama” and metallurgical coal a necessary competent other critical industries.”
Warrior Met recently saw the return of hundreds of mine workers who went on strike for two years seeking better pay and benefits. They failed in their attempt to negotiate better labor terms, and Cagle said the potential for well-paying, blue-collar jobs also help boost metallurgical coal’s profile on the state stage; shuttered mines have costs Alabama thousands of jobs and the met coal industry, which employed 1700 people statewide.
“That plays a big role into because our policymakers, both at the Department of Commerce and the state legislature, understand these jobs are good jobs,” he said, citing average industry wages in the high $60,000 to $100,000 range. “There’s no other industry that can pay wages this high. You can’t ignore that. Again, this. These jobs mean something to these families in the communities.”