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Global demand increases for U.S. metallurgical coal, which is needed to make steel


Coal production in the U.S. has fallen by half in the last 10 years. Utility companies have been switching to natural gas, which is cheaper, or to renewable energy. But then this year, demand went up for a different kind of coal. Here's Sandy Hausman of member station WVTF.

SANDY HAUSMAN, BYLINE: Deep Mine 41 in southwest Virginia produces metallurgical, or coking, coal. It's not the kind burned by power plants, but it is an essential ingredient for melting iron ore to make steel.

TARAH KESTERSON: It usually burns longer and hotter. And of course, it has the byproduct coke, which is essential to steelmaking.

HAUSMAN: Tarah Kesterson is with Virginia's Department of Energy. Earlier this year, it received 17 applications for new mining and sales permits.

KESTERSON: Over half of the metallurgical coal produced in Virginia is actually going overseas.

HAUSMAN: Much of it is headed for China, the world's largest consumer of coal. It once depended on Australia for half of its metallurgical supply but is now involved in a trade war with that country and is reaching out to other producers, including the U.S. Also driving demand - economies recovering from COVID. Ben Beakes, president of the Metallurgical Coal Producers Association here in Virginia, says production plummeted during the pandemic as construction projects were canceled or put on hold.

BEN BEAKES: It was one of the worst years the industry has ever seen.

HAUSMAN: But now global demand is back.

BEAKES: Metallurgical coal is really a proxy for steel, and steel is pretty much a proxy for the overall economy.

HAUSMAN: And now that Congress has passed a major infrastructure bill, he says, there will be an even bigger market for coking coal.

BEAKES: With the influx of federal funds to build bridges and roads and things of that nature, all of that requires steel.

HAUSMAN: Kesterson adds that won't be enough to again make coal king in Appalachia.

KESTERSON: You know, today we have about 20 mines actually mining coal. If you look back a decade ago, there were 70 to 80 mines working.

HAUSMAN: And half of those were producing coal for electricity. Today, given concerns about a warming climate, that share is less than 20%. But at Virginia Tech's Department of Mining and Mineral Engineering, Chair Kray Luxbacher is confident that demand for metallurgical coal will remain strong for years to come.

KRAY LUXBACHER: People are exploring other means of heating everything hot enough so that we can make steel with different substances, but really, we don't see anything that's yet commercially viable.

HAUSMAN: And for now, Beakes says every company in his Metallurgical Coal Association is hiring.

For NPR News, I'm Sandy Hausman.

(SOUNDBITE OF CAVES OF STEEL'S "KEEP PAINTING") Transcript provided by NPR, Copyright NPR.

Sandy Hausman joined our news team in 2008 after honing her radio skills in Chicago. Since then, she's won several national awards for her reporting from the Society of Professional Journalists, the Society of Environmental Journalists, the Radio, Television and Digital News Association and the Public Radio News Directors' Association.