Regional skilled labor shortage complicates US coal market stabilization

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Third-generation coal miner Keith Johnson drives home after working the graveyard shift underground in a coal mine in Harlan County, Ky. He had been laid off from one company and moved to another that then closed before finding the job he was returning home from in this 2014 file photo.
Source: Associated Press

Complicated labor issues persist for some U.S. coal companies looking to hire miners now that strong international markets are tempting metallurgical coal producers.

Coal jobs fell significantly in recent years, though the numbers rebounded a bit in late 2016 and have remained relatively steady since then. When the prospects for metallurgical coal improved, some executives reported highly skilled labor was difficult to find.

"A number of employees between 2010 and today that had transferable skills left the coalfields to take jobs elsewhere," Blackhawk Mining LLC CFO Jesse Parrish told S&P Global Market Intelligence in an interview. "Another group of underground miners basically retired without replacements coming in. Finally, you've had a portion of the workforce that has basically dropped out and is no longer participating."

The most recent data shows that coal production and jobs both took a dip in the last quarter of 2017. Still, total average coal mine employment remains slightly higher than the record lows of mid-2016.

At a recent job fair in Kentucky, Terry Blair, a personnel manager for Perry County Coal Corp., told WYMT that the company was looking to fill positions including a plant electrician and a mechanic for its underground mine. About 70 applicants stopped by in a region that was among the worst hit by the recent downturn in coal.

"We are short-handed," Blair said. "We have two underground coal mines with five active working sections and we need 20 experienced coal miners — yesterday."

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Scott Tiller, left, a coal miner of 32 years, talks with Donnie Coleman, chief safety director and a coal miner of almost 40 years, about a new federal regulation they must adhere to as they work at an underground coal mine in Welch, W.Va.
Source: Associated Press

Last year, Arch Coal Inc. said finding skilled labor was becoming a challenge as many miners decided in the last downturn that they would move to other regions or industries for work. The problem of finding skilled labor has been with the sector even through the downturn.

Inexperienced miners have a higher rate of injuries, according to the U.S. Mine Safety and Health Administration. The agency rolled out a safety compliance initiative after it found the first few coal mining fatalities of 2017 — a period in which coal production and employment picked up — were mostly miners with one year or less experience in the job they were working.

Some producers have had less difficulty finding workers.

Randall Atkins, executive chairman of Ramaco Resources Inc., said he found a surge of miners available when he recently opened up new mines in southern West Virginia. He said the labor market has certainly tightened, but one effect of that is very skilled workers are "kind of shopping a bit." In addition to being among the few coal operations in the region that are "new on the block," Atkins said several miners flocked to Ramaco's mines because they have very high seams of coal, something that is increasingly rare in the region.

"Miners can stand up," Atkins said. "It doesn't sound like a big deal, but it is a big deal that they can work physically standing for most of the day instead of a crouched position."

Alliance Resource Partners LP President and CEO Joseph Craft said in early 2017 that since President Donald Trump was elected, miners who had gone to other industries were flocking back. In the company's recent earnings call, he said labor availability is not causing any bottlenecks for his operations, which are spread across Central Appalachia, Northern Appalachia and the Illinois Basin.

Alliance focuses on thermal coal production, which sells to relatively stable domestic utility sources versus metallurgical coal, which is used in steelmaking and often sold into much more volatile international markets.