Murray Growing As National Coal Player
Consol Acquisition to Put Company in Top Five
3 November 2013
By Casey Junkins, Staff Writer
ST. CLAIRSVILLE - Once the $3.5 billion deal to acquire five
Consol Energy mines in West Virginia is complete, likely by the
end of this year, Murray Energy will join Peabody Energy, Arch
Coal, Alpha Natural Resources and Cloud Peak Energy as one of the
top five coal producers in the nation, according to coal
production figures from the U.S. Energy Information
Not bad for a company owned and operated by Belmont County native
Robert E. Murray, who founded Murray Energy Corp. by purchasing a
single continuous mining machine in 1988 after having worked in
the coal industry for many years.
"For comparison purposes, Murray (Energy) will go from 30 million
tons per year (of coal production) to almost 60 million tons per
year," said Christopher Bise, chairman of the Robert E. Murray
Department of Mining Engineering at West Virginia University.
Murray Energy’s acquisition of five Consol Energy coal mines,
including the Shoemaker Mine in Marshall County, will make the St.
Clairsville-based company one of the five largest coal producers
in the U.S.
Murray already operates the Century Mine near Beallsville and
the Powhatan No. 6 mine near Alledonia. The company recently
announced plans to complete the closure of the RedBird West Mine
near Brilliant, due to a lack of commercially mineable reserves
there. Murray operates several other mines across Appalachia, as
well as one in Utah.
Adding the five West Virginia Consol mines, including McElroy and
Shoemaker in Marshall County, to allow the company's production to
reach nearly 60 million tons of coal per year would rank Murray
Energy as the fifth largest producer of U.S. coal, according to
The most recent federal listing show that St. Louis-based Peabody
Energy produced 202.24 million tons of coal in 2011 to lead the
pack. This company is followed in production by St. Louis-based
Arch Coal, which yielded 160.28 million tons in 2011.
Bristol, Va.-based Alpha Natural Resources mined 116.4 million
tons of coal in 2011. Alpha acquired the former Massey Energy
early that year, less than 12 months after Massey's Upper Big
Branch Mine disaster. Meanwhile, Cloud Peak Energy, based in
Gillette, Wyo., was the fourth largest 2011 producer with 95.6
Consol produced 62.1 million tons of coal in 2011 to rank as the
fifth largest mining company in terms of production, but roughly
half of this production, about 28 million tons, will now go to
Murray. Murray Energy itself produced 26.84 million tons of coal
in 2011 and about 30 million tons of coal in 2012.
Because the sixth largest company produced only 33.3 million tons
in 2011, Murray's acquisition of the five Consol mines would rank
the company as the fifth-largest coal producer in America.
John Deskins, director of the Bureau of Business & Economic
Research at WVU, said there are at least 20 years worth of
reserves in each of the five West Virginia mines Murray is buying.
However, because of enhanced regulations from the U.S.
Environmental Protection Agency, burning coal in this country is
becoming more difficult and expensive.
In fact, over the past few years, Murray has often accused
President Barack Obama and Congressional Democrats of waging a
"war on coal," which he said will cause electricity rates to
skyrocket because of severe limitations on pollution from
coal-fired power plants.
However, Thomas Morrison, associate vice president of
Wheeling-based financial firm Hazlett, Burt & Watson, said
spiking energy demands in Asian cities such as Beijing and New
Delhi should keep the coal market viable.
"Foreign markets for coal are increasing because of the expansion
of power plants, especially in China and India where there are
plans to build even more plants," he said.
"Exports are becoming incredibly important for coal as coal
exports have exploded in recent years. Much of the future demand
for coal is in export markets," Deskins added.
Top Coal U.S. Coal Producers in 2011, according to most recent
statistics from the Energy Information Administration:
1. Peabody Energy, St. Louis - 202.24 million tons.
2. Arch Coal, St. Louis - 160.28 million tons.
3. Alpha Natural Resources, Bristol, Va. - 116.4 million tons.
4. Cloud Peak Energy, Gillette, Wyo. - 95.6 million tons.
5. Consol Energy, Canonsburg, Pa. - 62.1 million tons, roughly
half of which has been sold to Murray Energy.
12. Murray Energy, St. Clairsville - 26.84 million tons (would
increase to roughly 58 million tons with the Consol acquisition,
placing Murray Energy fifth on the list).