NEW YORK, June 27 The cost and lead time
involved in acquiring new equipment are among the impediments
to raising coal production in the United States, a coal company
executive said on Friday.
The cost of both machines and supplies has risen sharply,
and manufacturers need lead times of as much as 36 months to
deliver equipment, said Paul Vining, CEO of Magnum Coal.
"The price of poker has gone up," Vining told the 2008
McCloskey Coal USA conference.
U.S. coal producers are trying to increase production
because export demand is skyrocketing due to the Asian economic
boom and delivery problems in producing countries.
So far, although exports are up sharply, total output is up
only modestly, analysts said.
For example, the cost of roof bolts, the long rods driven
into mine ceilings to secure tunnels, has risen 60 to 80
percent in three years due to higher steel prices, Vining
Tires, explosives and other supplies are in short supply
and more costly, he said.
As for lead time, it takes 18 to 24 months to get a new
mining machine and up to 36 months to get a big coal-hauling
truck. Even tunnel tram cars take 15 months, he said.
The equipment and supply issues come atop tighter
government safety and environmental regulation, a shortage of
qualified labor and declining reserves, Vining said.
He said productivity in the key Central Appalachian area --
the amount of coal produced per worker -- is down 15 percent in
the past three years due to the various challenges.
(Reporting by Bruce Nichols; editing by Jim Marshall)