Russia hard coal crushes Pa. exports; Amish boost home demand

Rising hard coal exports from Russia, the Ukraine, Vietnam and North Korea and uncertain demand from Chinese foundries have left international anthracite prices "so depressed that we abandoned export," Greg Driscoll, the former Sunoco manager who is now CEO of Blaschak Coal Corp., Schuylkill County, told me.

Rivals like Siberian Anthracite are pushing millions of tons into the market through newly upgraded Russian railways and ports. "It's some of the highest quality," Driscoll admits. Ukraine exports also are up "dramatically" and prices are low. It's tough to measure current demand from China, whose factories crave anthracite, but there are signs demand has slowed lately, adding to price pressure, he said.

Despite the drop in exports, Driscoll says Blaschak boosted its total sales by five percent, to 315,000 tons, in 2013. "We reoriented ourselves," he says. "People in 20 Northeastern states still have some demand for anthracite" in heating stoves. And "it was so cold the first quarter and fourth quarter of last year" that domestic sales rose. More stoves are being installed in traditionalist Amish communities, which Driscoll says "have spread quite a bit" from the old Lancaster County heartland.

And it's not just farm stoves: "We've been very aggressively going after the U.S. steel industry" with anthracite as a furnace fuel, an alternative to bituminous-based coke. (Too bad some anthracite-using mills, like Claymont Steel in Delaware, have shut due to low steel prices lately.) "Our anthracite is used in water filters, and in the PCB (corrected) cleanup in the Hudson, and as a chemical reducing agent, and by sugar-beet processors.

Citing data from Resource Net, a Belgium-based consulting group, Driscoll says Russia anthracite exports topped 14 million metric tonnes in 2012 and 17 million last year. Ukraine exports topped 6 million tonnes, up 10%.  North Korea exports hit 16 million tonnes, up from 5 million in 2010. China is the major importer, buying 36 milllion tonnes abroad, eight to ten times what Europe, Japan and South Korea each bought.

Blaschak, owned by Radnor-based Milestone Partners since 2010, employs 150 at North Hazelton, Mahanoy City and Centralia. It's one of a handful of hard-coal producers that have pushed to expand production in recent years. So has Bruce E. Toll's Lehigh Anthracite, the Rich family's Reading Anthracite, Pagnotti Enterprises further north.

Driscoll says the companies have been successful boosting domestic consupmtion, and he says production should rise again next year. Blaschak processing plants have a yearly capacity of 450,000 tons/year.