A mine in Buchanan and Tazewell counties that produces coal for the steelmaking industry is adding 181 jobs and expanding its production amid increases in global demand due to the war in Ukraine and the promise of ramped-up infrastructure spending in the U.S.
Coronado Global Resources Inc. announced Tuesday that it will invest $169 million at its Southwest Virginia mine complex, which is already the largest producer of metallurgical coal in the Central Appalachian region. The mine currently employs 595 people.
“We are committed to our Buchanan operation in Virginia and see great potential for capitalizing on the growing demand for steel not only for construction and transportation infrastructure, but also renewable energy component parts,” Gerry Spindler, CEO of Coronado, said in a statement.
The company operates in Australia and the U.S.; its other U.S. mines are in West Virginia. In the U.S., almost all of its production is metallurgical coal, a different product than the thermal coal used to make electricity. It began production at the Virginia mine in 1983.
According to S&P Global Market Intelligence, the mine produced 4.8 million tons of coal in the 12 months that ended March 31 – a jump of more than 30% over the previous year. The Central Appalachian region’s 25 top producers combined mined 29.7 million tons of coal during that period. Mining companies in the region “have transitioned to a sharper focus on metallurgical grade coal” as coal-fired power plants close or transition to other fuels, S&P said.
In the news release, Gov. Glenn Youngkin heralded the expansion as a “win-win, creating 181 high-paying jobs in the resilient Buchanan community and increasing Southwest Virginia’s production of an essential component for the steel industry.”
The release said the new Coronado jobs will pay “above the average prevailing wage” in Buchanan County.
Depending on the specific job, the mean salary paid to underground miners in Virginia is in the $50,000 to $55,000 range, according to the Bureau of Labor Statistics.
The median household income in Buchanan County was $34,302 in 2020, according to census data. In Tazewell County, it was $42,207.
Youngkin approved a $3.5 million grant from the Commonwealth’s Opportunity Fund to assist with the project, the release said. The Virginia Jobs Investment Program will support the company’s employee training. The Virginia Economic Development Partnership worked on the project with Buchanan County, Tazewell County and InvestSWVA, a regional public-private business attraction and marketing initiative.
Coronado’s expansion comes as the war in Ukraine has driven up demand for non-Russian coal in Europe. In particular demand is a type of coal called pulverized coal injection material, or PCI.
S&P Global reported that in a May earnings call, Spindler said the PCI product output at the company’s Buchanan mine was “flat out and fully booked” as other nations look to replace Russian coal.
Meanwhile in the U.S., the $1.2 trillion Infrastructure Investment and Jobs Act signed into law last fall is expected to boost demand for steel and other building materials as it calls for construction of bridges, rail, public transit and electric vehicles.
The American Iron and Steel Institute, which heralded the legislation, estimated that demand for American steel could increase by as much as 5 million tons for every $100 billion of new investment.
Economic developers in Southwest Virginia have in recent years pushed new efforts to diversify the economy of the region, which once relied heavily on coal for wages and taxes.
Coal jobs in the state dropped by 27% between 2019 and 2021, according to data from the Virginia Department of Energy and the U.S. Energy Information Administration. In 2021, coal companies reported 2,006 direct employees in Virginia.
Studies and pilot projects have examined whether the region could support part of the wind turbine manufacturing supply chain, produce components for electric vehicles, host data centers, even grow specialty grains for brewers and distillers.
The creation of nearly 200 coal mining jobs might seem like a step in a different direction. But Will Payne, managing partner of Coalfield Strategies, who leads business development for InvestSWVA, believes it’s part of the same trajectory.
“Southwest Virginia is leveraging its assets in order to build for the future, and metallurgical coal production is an essential industry in the new energy economy,” he said. “Metallurgical coal is a critical steel-making input required for wind turbines, solar panels and battery components. Without companies like Coronado, we would not have renewable energy assets to deploy.”
In an interview this month with the Australian Financial Review, Spindler made much the same pitch.
“Steel is going to be a fundamental requirement for changing the grid and changing the environment for the acceptance of green technologies,” he told the publication. “Whether it is solar or wind, steel is going to play a part.”
State Sen. Todd Pillion, R-Washington County and co-chair of InvestSWVA, said Virginia takes “an all-of-the-above, and below” approach to energy, whether it’s solar, hydroelectric or coal.
“We’ve always – always – been supportive of coal mining, because it’s a legacy industry in Southwest Virginia that we have to be supportive of, now more than ever,” he said. “The expansion of anything in Southwest Virginia is always a win. Whether it be a legacy industry or whether it be a new industry, it’s always something that we’re excited about.”