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Alabama met coal industry, Port of Mobile helping each other grow

Few, if any, single entities are more important to Alabama’s economic success than the Port of Mobile. But the main industry fueling the port’s own surge might surprise some people.

As announced Monday by the Alabama Coal Association (ACA), the Yellowhammer State’s metallurgical (met) coal industry is booming. This is the type of coal sometimes referred to as coking coal. Unlike the thermal or steam variety, met coal is used as a vital ingredient in the steelmaking process instead of being utilized for power generation.

In 2018 alone, 11 million short tons of high-quality Alabama-mined met coal was exported to global steelmakers. This amounted to $2 billion worth of met coal being shipped out through the Port of Mobile last year – a dollar amount unprecedented in at least recent history.

The statistics released by the ACA on met coal exports for the 2018 calendar year are off the charts, but they also highlight a robust industry with a tremendous, albeit often under-appreciated, impact on the port and throughout the state of Alabama.

“Met coal is a Made in Alabama product that is quietly helping fuel our state’s economic engine,” ACA President Patrick Cagle said in a statement.

The facts

The state’s met coal is shipped to the world’s largest steelmakers, affirming the product’s reputation as some of the highest quality met coal on earth. The bulk of Alabama’s met coal exports go to Europe, South America and Asia.

The ability to quickly and efficiently move met coal from the mine to the Port of Mobile by both rail and inland waterways provides the state’s coal producers with a crucial competitive advantage.

The Yellowhammer State has large reserves of both steam and high-quality met coal, with underground coal miners in the state enjoying a starting salary of $85,000. Worldwide, met coal is found in fewer locations than steam coal but can sell for up to three times more than the power-generating form. Alabama’s high-quality met coal is similar to and competes against the hard coking coal mined in Australia.

Last year, met coal exports accounted for 70 percent of Alabama’s total coal production, while steam coal accounted for the rest.

Met coal industry, Port of Mobile benefit from each other’s success

“The industry’s impact is irreplaceable, from the thousands of high-paying jobs at underground met coal mines in the Tuscaloosa and Jefferson County area to generating almost half the revenue at Alabama’s Port,” Cagle emphasized.

Indeed, Alabama’s met coal industry and the Port of Mobile enjoy a mutually beneficial partnership, as coal is an integral economic driver for the port. This is most powerfully exemplified by the McDuffie Coal Terminal generating approximately 50 percent of the total annual revenue earned by the Alabama State Port Authority for its overall operations at the port.

“Alabama export coal is vitally important to the port’s and the state’s economy. We’ve invested over $150 million in shoreside infrastructure at our McDuffie Coal Terminal to support our mining industry, and we are working hard to modernize the harbor to keep our mining companies competitive with overseas coal mines,” Jimmy Lyons, director and chief executive officer for the Alabama State Port Authority, advised.

Moving forward, market conditions forecast continued optimism and growth for Alabama’s met coal industry. With its statewide economic impact in the billions of dollars, the industry’s success is lifting boats across Alabama.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn