Corsa Coal announced that it will be opening a second mine since Trump took office. Their CEO, George Dethlefsen, once again praised Trump and his “policies” for the recent expansion. He also claims the jobs created will be a big “shot in the arm” to the economy. It turns out, however, that these gains will create very few jobs and were the result of market conditions and money provided during the Obama administration.
To put this puzzle together, one can look at the first mine that Corsa opened in 2017. Dethlefsen also praised Trump for being responsible for his good fortune there as well. Here’s how Fox News reported the opening in June when it happened:
Corsa CEO George Dethlefsen said the mine will be a boon to the struggling local economy. He praised Trump’s easing of regulations and encouragement for fossil-fuel exploration.
But if one goes back to the company’s website on the day after the election (the article was probably written a day or two earlier and covers events up through September 30th, 2016), they themselves credit things totally unrelated to Trump when discussing the Somerset County mine:
- Spot prices for metallurgical coal have risen by approximately 250% on a year-to-date basis. Corsa plans to increase production and sell significantly more tons of metallurgical coal over the coming quarters. Corsa commenced development work at the Acosta Deep Mine in Somerset County, Pennsylvania, which is forecasted to produce 375,000 tons per year of low volatile metallurgical coal once fully operational. Coal production at the mine is anticipated to begin in the second quarter of 2017 and ramp up over the course of the year.
To simplify that — The market for metallurgical coal (coal that can be used for steel production, not fuel) is booming — prices up 250 percent. So Corsa is developing a mine to exploit that market.
They also explain how the project is being funded, in part:
- In September 2016, Corsa was notified that it was awarded $3,000,000 in funding under the Pennsylvania Redevelopment Assistance Capital Program (the “RCAP”) to develop an underground coal mine in Somerset County.
The RACP is a government-funded grant program that has actually existed since the 1990s. Corsa’s grant was given during the Obama administration well before Trump took office or anyone thought he was going to take office. the Governor in Pennsylvania is Tom Wolf, a Democrat.
Trump literally and practically had NOTHING to do with this mine. Also, the jobs created total about 70 jobs. Somerset County, Pa, has lost thousands upon thousands of jobs in recent years in the coal industry, 70 jobs will hardly revive the area.
As far as Corsa and other mining companies being hindered by the “big bad ‘gubermint'” — again, their own website tells us that wasn’t the case. In fact, they basically “laugh off” the fines levied on them for violations:
- Corsa reached a settlement with the United States Environmental Protection Agency and the Pennsylvania Department of Environmental Protection on the alleged Clean Water Act violations in the amount of $6.5 million. The entire $6.5 million was released from an escrow that was established in connection with the Company’s acquisition of PBS Coals, Inc. The Company was also reimbursed for its legal expenses from this escrow. As a result of this escrow release, the settlement of this matter had no impact to the cash flows of Corsa.
Now Corsa is opening a second mine since Trump became President. This time, they are overhauling an existing mine that they shut down. Why are they opening this mine? Because there is money in it. This mine will also exploit the higher-end metallurgical coal. But remember, those prices boomed last year, during Obama’s tenure when the price peaked at around $300 per unit. More recently, the price sits at about half that amount, around $150 per unit. From their website:
The metallurgical coal market is in very tight supply globally, with particular tightness in low volatile metallurgical coal supply in the United States. Spot metallurgical coal prices have risen sharply in July and August, as supply disruptions in Australia and the United States and coal production restrictions in China have taken tonnage out of the market. In a change from the recent surges in metallurgical coal prices which were primarily supply driven, steel demand has been a major contributor to increased demand for metallurgical coal. We expect a continued strong market for steel production in the second half of the year and into 2018.
Notice nothing about political trends or “favorable policies” from Trump. The Trump-supporting CEO can politicize it to Fox News, but when addressing actual investors and employees — none of that nonsense is even mentioned. Also in the financial report, they admit that their “boom” has been happening for five straight quarters. That again takes us back well into the Obama administration — when everything was supposedly bad according to Trump and many in the GOP.
Even if this second mine doubles the hiring — 140 jobs will hardly replace the thousands lost.
This is “winning?” Coal company gets subsidized to provide a fraction of the jobs they provided previously. The only reason the market is there is because of an insane temporary spike in prices. All of which happened during Obama’s tenure. Trump takes the credit. The vast majority of miners are left without any job or hope.
Oh by the way, that “steel industry surge the Corsa CEO was touting — that began back in the Obama era as well.
Unfortunately, these tiny mine openings won’t make any big dents in the economy as the main coal industry, the coal used for fuel, continues to decline at a rapid rate. Thousands of jobs cut and replaced with 10s or at best a couple hundred jobs — leaving thousands still in the lurch.