Out-of-state markets beckon for Colorado coal

It might be occasionally swept under the rug in the midst of discussions about natural gas and alternative forms of energy, but coal still constitutes the major source of fuel for electrical generation in the United States. And the worldwide appetite for coal will likely ensure that mines in Colorado continue to operate during the coming decades.

A geological survey estimates that 63 percent of Colorado coal is shipped to 27 other states and Mexico. While the average mine in Colorado can fetch about $30 a ton in the United States, the price can be higher in places like China. The economic giant is opening about one new coal-fired power plant each week.

“They’re buying it not to use here, but overseas,” said Vince Matthews, director of the Colorado Geological Survey, who addressed an audience at the Grand Junction Area Chamber of Commerce.

The demand has at times pushed the price of coal in China to as much as $240 a ton on the spot market for metallurgical grade coal. Such coal is used to make coke, which in turn is used to make steel.

While there are plans to convert coal-fired power plants in Colorado to natural gas and state law requires utilities to generate more power from renewable sources, coal mines could find other markets for their products.

Colorado has 27 coal fields. The fields with the most coal are located in Western Colorado, Matthews said. One new underground coal mine could open north of Loma, where Rhino Energy hopes to open the proposed Red Cliff Mine.

Colorado coal could benefit from nationwide efforts to reduce pollution. The local coal has a relatively low sulfur content, low nitrogen-oxide content and emits a high degree of heat when burned.