Expanding the Mined

Expanding the Mined
U.S. coal miners sit at the crossroads of worker safety and the environment -- two major public-policy issues that pose threats to the industry as a whole, but offer opportunities for individual companies that can adapt.

Increasing scrutiny of the industry''s environmental and safety performance has put a premium on companies that can mine coal more safely while causing less environmental damage.

Producers that can adapt to these new requirements also may benefit as higher compliance costs force other mining companies to close production, leading to less supply and higher prices.

"The market price of coal must ultimately reflect the cost of mining it safely," says Mark Liinamaa, coal-company analyst at Morgan Stanley.

A string of tragic accidents at coal mines since the beginning of 2006 has elevated the issue of mine safety, prompting passage of the federal Miner Act in 2006 and similar legislation by the state of West Virginia. In 2006, there were 47 coal-mine fatalities, up from 22 in 2005, according to the Department of Labor. Coal mining was the country''s fifth-most dangerous profession in 2006, according to the government''s data.

"How we deal with the issue of mine safety may very well determine the future of our industry," Brett Harvey, chief executive of Consol Energy Inc., said during a speech in August to the Utah Mining Association.

Mr. Harvey''s speech came just days after six Utah miners died during a cave-in at the Crandall Canyon Mine in Huntington, Utah, owned by Murray Energy Corp., a privately held company based in Cleveland. Three rescuers died in a second cave-in at Crandall Canyon as they were searching for the trapped miners.