In July 1997, Arch Mineral Corp. acquired Ashland Coal Inc. The merged companies formed St. Louis-based Arch Coal Inc., the largest coal producer in West Virginia.
Arch Coal's West Virginia operations mined 26.9 million tons of coal in 1997, just enough to edge out the longtime top producer, Consolidation Coal. Arch Coal owns four of the five largest surface mines in West Virginia. All four are mountaintop removal jobs. They produce 16 million tons of coal a year.
But competition to sell that coal is fierce. The main threat to West Virginia operators is cheap coal from huge Wyoming surface mines, industry officials say.
Ten years ago, Wyoming produced 181 million tons of coal a year, about one-fifth of U.S. production. Today, Wyoming produces 320 million tons of coal annually, nearly a third of nationwide production.
Over the same period of time, central Appalachia's share of national coal production has remained the same, about one-fourth.
"The pricing power and market share of West Virginia's coal has been eroded by competition from Wyoming's Powder River Basin," a task force appointed by Gov. Cecil Underwood concluded in November.
In Wyoming, coal seams are 100 feet thick. Coal companies remove 20 or 30 feet of rock and earth to reach them.
West Virginia coal seams are much thinner, and the rock and earth above them much thicker. Coal companies remove 100 feet of rock and earth to reach a couple of coal seams. If they're lucky, each is 2 or 3 feet thick.
Wyoming coal costs much less to mine. Ohio River power plants can afford to haul it across the country.
By 2000, central Appalachian coal will cost one of American Electric Power's plants in Mason County $1.27 per million Btu. Powder River Basin coal will cost the same plant $1.22 per million Btu.
"There is no room for costs for central Appalachian coal to go up," said Jerry Eyster, a Washington-based coal consultant. "The marketplace will shift further to western, Powder River Basin coal, and Appalachian production will decline."
So far, West Virginia mines have only kept pace by producing more coal with bigger equipment and fewer workers.
"It takes these large-type mines to create this type of volume," said Ken Woodring, executive vice president of Arch Coal. "This is by far the best approach."
In 1986, the average coal miner in West Virginia produced 4,000 tons of coal a year, according to the state Office of Miners' Health, Safety and Training. By 1996, the average miner produced 8,000 tons a year.