Coal is seeing a 'Trump bump' but that doesn't mean a lot of mining jobs will return, experts say

Peabody Coal mine in Indiana. (Luke Sharret, Bloomberg)

The coal industry has "enjoyed a 'Trump bump,' thanks to the president’s pledges to 'bring the coal industry back' and 'put our great miners and steelworkers back to work,'" but it remains unlikely that coal will see the revitalization promised by the president, reports Steven Mufson of The New York Times.

"Coal prices are about double what they were a year ago," Mufson reports. "Rail-car deliveries of coal are up 16 percent this year. The more than 50 coal-mining companies that went bankrupt over the past couple of years have unloaded billions of dollars of debt. And Trump has vowed to roll back environmental regulations that the industry says are part of a 'war on coal'” waged by the Obama administration.

Some major companies "have seized the moment to issue stock or sell bonds to raise money from investors willing to wager on the effects of a friendlier Trump administration," Mufson writes. "But the obstacles on the other side of the ledger remain daunting: Coal-fired power plants continue to shut their doors. Bountiful supplies of U.S. shale gas are keeping natural gas prices low and competitive, and renewable sources of power generation are growing rapidly. Though most experts expect U.S. coal sales and output to top last year’s levels, they also expect the decline to resume in 2018."

"Some coal companies will survive, and some could thrive," Mufson writes. "Metallurgical coal will be needed to make steel in India and China and in the U.S., especially if there is a boost in infrastructure spending. And thermal coal will still be used to generate electricity for years, even if at lower rates. But to show profits, coal operators will have to trim output from the oldest, least-efficient mines in Appalachia (where Trump garnered crucial votes in the election) and shift their focus to the Illinois Basin and the Powder River Basin in Wyoming."

Chiza B. Vitta, a coal analyst at Standard & Poor’s, told Mufson, “A lot of people conflate two primary things: the coal industry and coal jobs. Even if the coal industry were to do better, that doesn’t translate into coal jobs. Over time the process has become more and more efficient, and they’re able to mine with fewer and fewer people working.”

Mufson notes that some analysts don’t even expect the industry to do better. Citigroup said in a series of reports; “Trump’s rhetoric on the campaign trail would also suggest that coal is about to see a big lift in the post-Obama era, but the reality may be less rosy. The regulatory environment for coal should improve under Trump’s presidency. ... Comparative economics for coal, renewables and gas place clean coal firmly at the bottom of the stack in the U.S.”