A labor shortage and reluctance to open new mines has left US coal companies struggling to keep up with surging global demand.
“It’s very difficult for the coal industry to increase production,” Xcoal Energy & Resources CEO Ernie Thrasher said Monday in a phone interview. “Everyone is working within the limits they have.”
The turbulent global supply chain has created bottlenecks that have some of Xcoal’s current deliveries running two to four weeks late, though Thrasher said the disruptions are “nothing out of the ordinary” and represent less than 5% of the company’s total shipments. The closely held coal miner hasn’t declared force majeure for any contracted shipment, he said.
A global recovery from the economic impacts of the pandemic is increasing demand for power, creating a shortage of natural gas. That in turn has triggered a boom in coal that has been hard for suppliers to meet. Utilities in Europe are snapping up coal cargoes to keep the lights on, and European prices have almost tripled since the start of the year.
While high prices are good for producers, Thrasher doesn’t know how long that’ll last -- making strategic planning difficult. The Latrobe, Pennsylvania-based company expects to deliver about 16-million tons this year. Xcoal produces coal for power plants and steel companies, and demand for both is booming.
“I’m glad coal is still supplying energy to people who need it,” Thrasher said.