Alabama mines find good news with projected coal industry growth

BIRMINGHAM, Al.
There is good news for Alabama's big coal miners, according to an investment report.
The Paragon Report, an independent investment researcher, said in a recent research note that coal demand is projected to increase significantly over the next 25 years due to industrial growth in emerging markets. Most analysts argue that the coal market is set to explode, the report said.
The report cited the prospects of Birmingham-based Walter Energy, a publicly traded company that operates two large underground metallurgical coal mines in Tuscaloosa County. The company also operates Walter Coke in Birmingham, Black Warrior Methane, Taft Coal Sales in Jasper and Tuscaloosa Resources, which produces steam and industrial coal.
The Paragon Report also cited a top official of Birmingham's Drummond Co., which is family owned, who said coal prospects are rising after the Fukushima nuclear incident in Japan.
"Drummond Coal sales president George Wilbanks says coal demand rose over the past decade as China led growth in Asia and may accelerate to push up export volumes after the potential shock of Fukushima to the previously anticipated role for nuclear power generation," the report, issued this month, said.
Coal-fired power plants produce slightly less than 50 percent of U.S. electricity. Electrical power generating stations accounts for more than 90 percent of U.S. coal consumption. It is an important Alabama industry, producing about 20 million tons a year and employing about 4,200 people.
Earnings are looking up. Paragon cited analyst Michael Dudas, an analyst with Birmingham-based investment adviser Sterne Agee, who said in a note to clients that earnings reports from coal companies show that demand has been stronger than expected.