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NMA President Says Coal Has Positive Outlook

Manufacturing Group | January 29, 2013

Due to Clear Improvements in Key Sectors of U.S. Economy and Global Demand for Mined Products

The following points were made by National Mining Association (NMA) President and CEO Hal Quinn at a press briefing held at NMA's Washington, D.C., headquarters:

"The outlook for U.S. coal and minerals mining in 2013 is positive due to clear improvements in key sectors of the U.S. economy and the global demand for mined products, particularly in developing economies. While we see continued slow growth in the overall U.S. GDP and another slight contraction in Europe, projected increases in domestic new-home construction and automobile sales forecast to reach 15.3 million in 2013 are buoying demand for copper, palladium, molybdenum and other metals that are vital to these sectors. U.S. copper production, alone, is expected to be up by more than 10% in 2013, according to mineral commodity specialists at the U.S. Geological Survey (USGS).

"Iron ore production will benefit from infrastructure projects and stimulus spending in China, the world's biggest buyer and the purchaser of 40%of worldwide production of all base metals.

"Gold demand is expected to remain relatively strong, according to GFMS and USGS analyses, driven by continued financial uncertainty, central bank purchases of gold to diversify reserve assets and the continuation of current monetary policies here and abroad. At this point, the USGS expects a slight uptick in 2013 U.S. gold production. Silver tends to run in tandem with gold, based on investor demand, but has a variety of industrial applications that will be strong in China, in particular.

"Coal is on track to become the world's primary energy source—surpassing oil—by 2015, according to Wood McKenzie, two years ahead of the International Energy Agency's current estimate. Here at home, coal's contribution to meeting electricity demand will increase by nearly 45 million tons over 2012 levels, and total domestic consumption will rise by 50 million tons due to slight improvements in the U.S. economy; cooler weather; and natural gas prices that are expected to increase by 22%, according to the Energy Information Administration (EIA).

"Demand for coal in Europe has increased—particularly in Germany and Britain—in response to higher gas prices. Demand for coal throughout Asia for electricity and steel production contributes to a robust U.S. coal export forecast of 111 million tons in 2013.

"With these improved conditions for coal production and demand in 2013, NMA expects total U.S. coal production to come in at 1.016 billion tons in 2013—slightly more optimistic than EIA's January short-term forecast.

"Longer-term, NMA expects U.S. coal to benefit from recent and planned construction of higher efficiency coal-based power plants with higher output rates and lower emissions.  The remaining coal fleet will, on average, be larger, more efficient and run at higher capacity—recovering at least 100 million tons of U.S. coal production lost to retirements of older plants.

"We continue to see improvements in U.S. mine safety and health. We finished 2012 with the second safest year on record for mine fatalities. Nonetheless, we are well short of our goal of eliminating fatalities and reducing our injury rate by 50% by 2015.  We believe NMA's CORESafety safety and health management system gives our operations and the people who work there the tools to reach that goal.

"Public policy challenges continue to limit the potential of U.S. mining to provide reliable materials and affordable energy vital to our economy and way of life. Inefficient and unpredictable permitting processes thwart investments that provide high-paying jobs and added value throughout the chain of production. Regulations that needlessly limit our energy options by halting the construction in the U.S. of new advanced coal plants that can serve as the platforms for cleaner coal technologies worldwide are a failure of ambition and policy. If the U.S. wants to compete with the world's fastest growing economies and remain in the forefront of technological innovations, we must address these critical shortcomings."  

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