ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, March 26, 1996 TAG: 9603260042
SECTION: BUSINESS PAGE: C-7 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Virginia's coal industry continued its long decline last year, according to figures just released by the Virginia Department of Mines, Minerals and Energy.
The number of Virginia mines in operation dropped to 374, an 11 percent decline from 422 a year before. Coal production declined by 3 percent to 37.6 million tons in 1995, and the number of employed coal miners dropped by 16 percent from 8,318 to 6,975.
A number of factors account for the decline of the state's coal mining industry, said Carl Zipper, associate director of the Virginia Tech Center for Coal and Energy Research.
The state's better coal reserves are depleted, and the coal that remains is more difficult and expensive to mine. Virginia's industry, which began in far Southwest Virginia in the 1880s, is older than that in many other coal producing states, Zipper said.
The geologic conditions in the Virginia coalfields sometimes cause problems for miners, he said. Virginia's seams are thinner and often vary in thickness.
The market for metallurgical coal, the higher quality coal found in Virginia that can be used for making steel, is not growing, Zipper said. Competitors, particularly producers in Australia, have cut into the export market for Virginia's metallurgical coal, and the economies in European countries, who buy Virginia coal, have been flat.
When inflation is taken into account, Virginia coal is actually selling cheaper than it was a few years back, Zipper said. After passage of the Clean Air Act in 1990, it was expected that the price paid by electric utilities for Virginia's cleaner-burning low-sulfur coal would increase, but that never happened, he said.
It was those factors - depleted reserves, poor mining conditions, a soft export market and low prices - that spurred Virginia's coal industry to ask for help from this year's General Assembly. The legislature increased a year-old tax credit designed to make it more affordable for companies to mine the tougher seams and to stanch the decline in coal-mining employment, at least for a few years.
The legislation, assuming it is signed by the governor, would be worth about $188 million to Virginia coal companies. It would be phased in over a five-year period beginning in 1999. The amount of credit depends on the size of the coal seam and the number of tons mined.
LENGTH: Medium: 55 lines ILLUSTRATION: GRAPHIC: Chart: Number of production employees in Virginiaby CNBmines.