FAIRBANKS — Usibelli Coal Mine’s last export of coal sailed out of Seward in July, and the Seward coal loading facility is going into cold storage mode, according to the company’s vice president of External Affairs, Lorali Simon.
The 75,000-ton coal shipment will be Usibelli’s last coal export, at least until the market improves, Simon said.
A strong U.S. dollar, cheap natural gas and cheap coal from Indonesia and Australia created an unfavorable international coal market. Simon said the poor market conditions prompted the Alaska coal company to halt exporting for the time being.
“We’ve seen fluctuations in the market over the years, this fluctuation is just lower than what we’ve seen in the past,” Simon said.
Usibelli has been exporting coal from the Seward coal loading facility since the 1980s. In 2011, Usibelli produced 2.2 million tons of coal, exporting 1.2 million of it to Chile, South Korea and Japan.
“You can see how much our production has declined,” Simon said. “Over the past few years, there’s been some belt tightening. We have laid off about a third of our employees.”
Simon said their Usibelli's mine workforce has dropped from about 150 employees to a little more than 100. She said Usibelli has been able to rehire some of those employees when other miners retired or left the coal company for other reasons.
With the power being turned off at the Seward coal loading facility, Simon said there are only a few Usibelli employees left in the coastal town, wrapping-up a few projects.
Usibelli employees in Fairbanks have avoided layoffs since they are administrative employees, she said.
In the meantime, Usibelli officials will continue to monitor international coal markets for the next opportunity to make profitable coal exports.
“We are hopeful that the global market will see a positive shift in coal prices over the next few years,” Simon said.
Alyssa Rodrigues, an economist working for the state of Alaska, said the state will certainly lose some tax revenue, but it’s difficult to predict exactly how a lack of coal exports will affect Alaska’s economy. She said there would likely be indirect effects on the transportation industry, which is tied to the coal producer.
The McDowell Group, an independent research group, published a 2015 report on socioeconomic impacts of the coal mine on the state of Alaska. The report said 58 percent of the Alaska Railroad Company’s revenue is generated through transporting freight.
If the market shifts and Usibelli can start exporting coal again, it would be a good boost for Alaska’s economy, Rodrigues said.
“By good I mean it has the potential to create jobs and generate additional revenue,” she said.
Usibelli’s operation powers the Interior, using about a million tons of coal each year.
But Simon said there are no new coal plants being built, since more rules and regulations have been introduced to the coal industry.
“Our only opportunity to grow is on the export market,” Simon said. “That is absolutely a reflection of the war on coal waged by the Obama administration.”
Contact staff writer Kevin Baird at 459-7575. Follow him on Twitter: @FDNMcity.