“We’re booming,” Justice said. “This is the biggest upswing I’ve seen in five years. Everyone’s excited.”
Like a mountain stream reviving after a drought, money is trickling into Appalachia again -- at least, for now. It begins with a trio of global forces: Chinese production curbs, President Donald Trump’s anti-regulatory policies and investor bets that have, over the last year, doubled the market value of publicly traded U.S. coal companies, to $15 billion.
It ends in cities like Logan, population 1,800, where streets that once bustled with small businesses are now blighted with shuttered stores, boarded-up windows and sidewalks laced with cracks.
The gossip here is no longer about mine closures and mass layoffs. Miners are snagging $1,000 signing bonuses, fully paid health insurance and raises again. Justice just earned a 50-cent-an-hour bump.
At the Marathon gas station where Justice stopped for breakfast, business was up 15 percent in only the last couple of months. Owner Isom Ooten has extended store hours after cutting back just last year.
“Coal in our counties is number one, I don’t care what they say,” Ooten said. “I want the economy to come back.”
Southern West Virginia, a rolling mountainscape of coal-producing counties, has much ground to make up. Large, out-of-state companies built camps for workers generations ago that grew into thriving towns now near collapse.
About 34,000 people live in Logan County, less than half the number in 1950. Along with its neighboring counties, it leads the nation in fatal prescription painkiller overdoses.
From 2008 to 2016, production from West Virginia’s southern coalfields fell from 117 million tons to 36.6 million, according to the U.S. Mine Safety and Health Administration. Cheap natural gas, which became America’s dominant power-plant fuel, spurred the collapse. The industry rout drove some of the country’s biggest miners, including Alpha Natural Resources Inc., which runs the Ruby Energy facility, and Arch Coal Inc., into bankruptcy.
Now, the trend is reversing. Through mid-April, coal output rose 9 percent in southern West Virginia compared with a year ago, according to the U.S. Energy Information Administration.
That’s because prices tripled over the last year for metallurgical coal, which is used in steel-making and hard to find elsewhere in North America. China touched off the rally in 2016 when it curbed production. In late March, Tropical Cyclone Debbie hammered Australia’s coast, disrupting global supplies and making U.S. coal even more valuable.
Wall Street took notice. Randall Atkins, chairman of coal company Ramaco Resources Inc., recalled bankers coming to him last fall “on bended knee,” begging him to take his company public.
In February, Ramaco, backed by private equity funds Energy Capital Partners and Yorktown Partners, held the U.S. coal industry’s first IPO in two years. Warrior Met Coal Inc., whose largest investor is Apollo Global Management LLC, followed suit in April. The two companies raised half a billion dollars. Coronado Coal LLC, part of Energy & Minerals Group’s portfolio, may be next.
“Mainstream investors are now looking at coal again,’’ said Jeremy Sussman, a New York-based mining analyst with Clarksons Platou Securities Inc. “Six months ago, that wasn’t the case.’’
Elk Creek, a new Ramaco mine in Logan County, will reach full production this summer. When the company held a job fair there in March to fill about 40 spots, more than 850 people showed up.
Competition for certain high-skilled positions – such as mechanics and electricians – has grown so fierce that companies are covering workers’ health-care premiums. Bluestone Industries – part of West Virginia Governor Jim Justice’s business empire – recently offered as much as $1,000 for signing bonuses.
Boom and bust are familiar features of the coal business, and locals are still cautious. On a recent weekday afternoon, Scott Skeens’s blue mechanic suit was streaked with grease because he was so busy repairing mine equipment. Orders have risen 40 percent this year at his company, Logan Hydraulics. His staff of two probably won’t be able to handle all the work, but he wasn’t expanding yet.
“Since Trump got in, things are trying to rebound,” he said. “Hopefully, I’ll hire more people real soon.”
Not everyone is so bullish. In downtown Logan, Michael Cline hasn’t seen an uptick in traffic at Hot Cup, his coffee shop.
The son of a coal miner, Cline recalled a childhood standing with his dad in tense picket lines. Today, the pony-tailed Bernie Sanders supporter is convinced that Logan must diversify its economy or turn into a “ghost town” in the next downturn. He’s still wary of the out-of-state corporations.
“They’re just finding investors who buy into Donald Trump’s empty promises,” he said. “It’s just Monopoly money. It’s going to go bust, and we’ll be even worse off.”
A few miles up the road, in a sleek convention center on the flat top of an old mountain mine, Paul Lang, president of St. Louis-based Arch Coal -- America’s second-biggest producer by tonnage -- recently offered a presentation on the industry’s future. He addressed a dinner for the Tug Valley Mining Institute, which opened in 1946, making it the oldest such industry organization in the state.
Lang outlined how Trump can help the industry by easing regulations and promoting infrastructure spending. But he’s no Pollyanna. China, more than Trump, spurred this revival, he said, and natural gas will continue to be the fuel of choice for more U.S. power plants.
“Why did Logan County get hit so hard? The answer’s right there,” Lang said, showing a chart depicting gas’s rise and coal’s collapse. “It’s going to be hard to bring that back.”