Largest coal mines still in Wyoming, but US is diversifying

The Powder River Basin was the home of the top nine producing mines in the U.S. during 2013, according to SNL Energy data, but the number of PRB mines in the top 25 declined compared to 20 years ago as large operations emerged in the East.

Of the current top 25 mines, two that did not produce any coal in 1994 — the earliest year for which SNL Energy data is available — were in the Illinois Basin, illustrating the emergence of high-sulfur coal from the region as more utilities install environmental controls on their power plants.

The top Illinois Basin mines are only growing. Alliance Resource Partners LP's River View mine in western Kentucky, which did not start producing coal until 2009, produced 9.3 million tons in 2013, ranking No. 14 on the list of highest-producing mines in the U.S. According to early data released by the U.S. Mine Safety and Health Administration, River View produced 2.4 million tons in the first quarter of 2014, just shy of its all-time quarterly record.

Peabody Energy Corp.'s Bear Run mine in Indiana, which started producing coal in 2010, produced 8.3 million tons in 2013, ranking No. 20 on the list. According to early data released by MSHA, Bear Run produced 2.1 million tons in the first quarter of 2014, its highest-ever first-quarter production total.

In 1994, the only Northern Appalachian mines on the top 25 list were CONSOL Energy Inc.'s Enlow Fork mine, at No. 20, and CONSOL's Bailey mine, at No. 24. In 2013, two Murray Energy Corp. operations joined the list. Three Northern Appalachia mines ranked in the top 13.

Murray's Marshall County mine — acquired in the landmark deal with CONSOL in 2013 — produced 9.4 million tons in 2013, more than double its 1994 total. Marshall County was formerly known as McElroy. Murray's Century mine in Ohio, which started producing coal in 2001, according to MSHA, produced more than 8 million tons in 2013, ranking No. 22 on the list.

Other newer mines cracking the top 25 in 2013 were Energy Future Holdings Corp.'s Kosse lignite strip mine in Texas, operated by Luminant Mining Co., and Peabody's El Segundo mine in New Mexico, both outside of the PRB. Kosse began producing coal in 2009, and El Segundo started producing coal in 2008.

Four companies dominating production

The 25 top-producing mines in 2013 were owned by 13 different companies. Peabody controls six of the mines, and Cloud Peak Energy Inc. owns three of the top seven. Alpha Natural Resources Inc., with its massive Eagle Butte and Belle Ayr mines in the PRB, owns two of the top six. NACCO Industries Inc. has two North Dakota lignite mines in the top 25.

In an October 2013 report, the U.S. Energy Information Administration said four coal companies — Arch Coal Inc., Alpha, Peabody and Cloud Peak — supplied more than half of all U.S. coal production in 2011 and 2012. In 2011, Peabody, Arch, Alpha and Cloud Peak supplied a combined 575 million tons, or 52% of total U.S. production. More than 500 other companies supplied the other 48%, the EIA said.

In 1990, the EIA said the top four producers accounted for 22% of all production. By 2002, when total coal production levels were nearly identical to production in 2011, the EIA said the top four coal producers accounted for 40% of total U.S. production.

One major reason is the scale of PRB mines. For example, Peabody's North Antelope Rochelle mine in Wyoming has increased production nearly 400% since 1994. The huge Peabody operation used to be two separate mines, North Antelope and Rochelle, but they were combined in 1999.

Arch's Black Thunder mine, the top-producing mine in 1994, has almost tripled its production in the past 19 years. The growth of Black Thunder can be attributed in part to Arch's acquisition in 2009 of the Jacobs Ranch mine, which was later merged into Black Thunder, creating a single massive operation. A similar event occurred in 2004, when Arch acquired the North Rochelle mine and rolled in into Black Thunder.

The U.S. Geological Survey estimated in February 2013 that 25 billion tons of PRB reserves were economically recoverable out of 1.07 trillion tons of in-place resources, though it acknowledged that an increase in PRB pricing would boost the estimate. Receipts of PRB coal by the electric power sector totaled 398.5 million tons in 2013.