Coal Trade Booming

by James Ridgeway

As I reported in an earlier column, the search for a cheaper way to electrify the world has led to a sudden boom in exports of American coal. In the past, most of the export coal went into making steel. Now the demand is for steaming coal, and the ports of Philadelphia, Baltimore, Norfolk, and Newport News are jammed with ships awaiting cargoes.

Coal for electricity traditionally has been confined to shipments from Appalachia to Ontario. Last fall, however, the Central Electric Generating Board of Great Britain placed its first order for steaming coal. Others followed. As a result, all three of the East's big coal-transporting railroad systems-Chessie, Norfolk & Western and Conrail -are expanding and refurbishing their systems.

The boom in coal exports probably won't peak for another two or three years, but the sharp increase in demand has surprised industry analysts who have had to readjust their projections from seven million tons to 12 million tons in 1980. (In addition to steam coal, the U.S. now exports about 60 million tons of metalurgical coal.)

Other nations including Denmark, Japan, Sweden and France all have indicated interest in helping to finance new ports along the U.S. east coast I n addition to expanding port facilities at the points mentioned above there is talk of building new export facilities at Savannah, Georgia, or Wilmington, North Carolina.

The International Energy Agency estimates world trade in steam coal could reach 700 million tons annually, equal to overall U.S. yearly production, and on a BTU basis equal to Saudi Arabian oil exports.

Most of the growth in the world coal trade will depend on increased production in the U.S., Australia, South Africa, Canada and possibly China. But other sources should not be overlooked. Colombia, for example, is thought to contain the largest coal reserves in Latin America. There are about 10 billion tons in Colombia which have not been developed because of non-existent infrastructure and lack of capital. Recently Denmark signed agreements with Exxon's Colombian subsidiary, Intercor, for delivery of two million tons a year over 14 years.

Chile is another Latin country with potentially significant coal reserves, located in the far south along the straits of Magellan. In an effort to cut the costs of oil imports, Chile has contracted with SOFREMINES of France to carry out technical and economic feasibility studies on favorable locations.

The dependence of the U.S. for cobalt (used in jet engines) on Zaire has been frequently cited in Congress to demonstrate reliance on the "unstable" Third World. Now comes gratifying news that Noranda Mines of Canada may soon begin cobalt mining operations in Idaho. Reserves of 4 million tons of ore have been identified, containing both cobalt and copper. If Noranda goes ahead, it will mark the first cobalt production in the U.S. since 1959. The production target of four million pounds a year will amount to 20 percent of U.S. imports, and doubtless raise fears of undue reliance on the Canadians.

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