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The Mineral Industry

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Introduction

The vast supplies of certain mineral resources, particularly coal, played an important role in the early settlement of the Appalachian Region.  Recent shifts in consumption patterns, markets, and population and increased mechanization have, however, reduced employment in mining although the mineral industries still comprise a substantial part of the economy.

Much of the Appalachian economy has long centered around coal mining, and the rise and decline of Appalachian economy can be written as a history of the coal industry.  Many Appalachian communities were almost entirely dependent upon the earnings of men employed by coal companies.  The dislocations caused by the loss of traditional coal markets, coupled with the industry's mechanical revolution, has had severe consequences for many of these communities.

The economic problems of Appalachia cannot be understood, nor can an appraisal of the mineral resources of Appalachia be successful, without an understanding of the past and possible future economic ramifications of mineral development.  It is for such an understanding that this part of the report has been prepared.

Fuels

The early history of the mineral industry in Appalachia is essentially that of fuels.  Both the U.S. coal and petroleum industries were born in this region, and they continue to be its largest mineral industries. 

Prior to and immediately following the American Revolution, coal was primarily used locally for domestic fuel, brickmaking, and blacksmithing.  This situation changed with the advent of the steam engine, the construction of canals such as the Erie and the Schuylkill, and the building of the railroads.  Coal output increased substantially around the middle of the 19th century as the new modes of transportation gave additional impetus to the industry, not only as a consumer but as a means to new markets.

The petroleum industry developed during the latter part of the 19th century.  The first well drilled exclusively for oil on the North American Continent was completed by Edwin L. Drake, a railroad conductor from Connecticut, in August 1859 near Titusville, Pa.  The discovery of oil here led to subsequent development of oil fields in Pennsylvania, New York, Ohio, West Virginia, Kentucky, and Tennessee before the end of the century. 

By the beginning of the 20th century, the efficiency of coal production, together with the proximity of the coal deposits to the most heavily populated and industrialized parts of the United States, had made coal preeminent in the energy market.  Coal was consistently responsible for 70 percent of the total energy derived from mineral fuels and waterpower until 1920 when petroleum products began to make the first significant inroads into the heating and transportation markets.

In the late 1920's, improvements in steel metallurgy and pipeline-welding techniques permitted the economic and safe transportation of natural gas under high pressure.  This technological advance resulted in shipment of gas into Appalachia and surrounding areas, and gas began to make an impact on traditional coal markets because of its competitive advantages in cost, cleanliness, and high-heat efficiency.

Such inroads caused drastic losses in the anthracite domestic space-heating markets, traditionally the largest outlet for this fuel.  Less serious losses occurred in bituminous coal retail deliveries and railroad markets.  The losses in these traditional markets were counterbalanced somewhat by increased shipments to industrial facilities, electric-utility companies, and by exports.  Nevertheless, the bituminous coal and anthracite industries both declined in relative importance to the Appalachian mineral economy.  In 1945, fuels represented approximately 87 percent of the total value of Appalachian mineral production (see table 5); by 1964 they had dropped to 80 percent.

Principal mineral production of the Appalachian Region, 1945-64

Table 5.  Principal mineral production of the Appalachian Region, 1945-64.

During the 1945-64 period, total mineral production in the United States increased at an average annual rate of 3.8 percent, gross national product rose 3.2 percent each year, and national energy consumption increased a total of 57 percent.  Energy derived from oil and gas rose 173 percent and that from bituminous coal declined 23 percent.  On the other hand, within Appalachia, coal represented 89 percent of the value of mineral fuels produced in 1945 and 91 percent in 1964.  During this period the national coal industry sustained the complete loss of railroads as a consumer of coal and the nearly complete loss of the home-heating market.  The home-heating market may be indirectly recaptured because of the advent of electric space heating, which may result in the burning of more coal to generate electricity.  Use of coal by the electric-utility industry has increased markedly.  Presumably, the national situation is analogous to that in Appalachia because the region's coal mines produced more than 70 percent of national output throughout the 1945-64 period.

The only important growth in the Appalachian bituminous coal market in recent years has been for the manufacture of electric power.  The tonnage of bituminous coal consumed by electric utilities increased from 72 million tons in 1945 to 223 million tons in 1964.

In spite of this increase, the overall consequence of the competitive factors outlined above has been decline in Appalachian coal output from a high of 469 million tons in 1947 to 287 million tons in 1961.  Under the stimulus of this decline, innovations have occurred in the mining, processing, transporting, and marketing of bituminous coal.  Greater mechanization and automation of production and processing have resulted in increased productivity and lower employment which, together with an improvement in the overall economy, led to a production increase to 361 million tons by 1964.  Coal-mine employment, however, has continued to decline.

Continuous-mining machines, in recent years, have won increasing acceptance by the industry.  Machines now cut, load, and convey coal to the mine mouth, much reducing labor requirements.  The growth of machine mining is illustrated by the fact that less than 1 percent of the total U.S. underground production of coal was mined by continuous-mining machines in 1950, whereas 39 percent was so mined in 1964.  Of the total underground production, 96 percent is mechanically cut and 87 percent is mechanically loaded.

Strip-mine production has also increased as a result of the development of larger and improved stripping and drilling equipment and trucks.  The trend has been toward power shovels and dragline excavators with large dipper and bucket capacities.  Approximately 19 percent of the total coal mined in Appalachia in 1964 was produced from stripping operations.

The average output per man-day in Appalachian strip mines is about double that of underground mines.  In 1964, average labor productivity in Appalachian underground mines ranged from a low of 2 tons per man-day in Georgia to a high of 15 tons in West Virginia.  Average strip-mine output per man-day, on the other hand, ranged from a low of 20 tons of Pennsylvania to a high of 50 tons in Kentucky.

The market losses and technologic innovations have resulted in a decline in total U.S. employment in bituminous coal mining from a peak of 705,000 in 1923 to 129,000 in 1964, and most of it took place in Appalachia.  The decline has caused serious social and economic problems.

The competitive advantages in transportation held by other fuels (petroleum and natural gas) have recently forced the development of new concepts of coal transportation such as the coal-slurry pipeline, the "unitrain," and the mine-mouth powerplant.  The coal slurry pipeline, which operated between Cadiz, and Cleveland, Ohio, transported a mix of coal and water in much the same manner as crude petroleum.  To meet this competition, the railroads devised the utilized train and thereby lowered rail freight rates.  When unitized trains were introduced, the slurry pipeline operation ceased.  The mine-mouth powerplant concept utilizes coal as a fuel to produce electricity at the mine, and thus eliminates the need for long-distance coal transport.  High-voltage transmission may prove less costly than the transportation of an energy equivalent of coal and may further increase the use of Appalachian bituminous coal for electric power generation.

The anthracite industry has not been as fortunate.  In 1950, anthracite accounted for 34 percent, fuel oil for 55 percent, and natural gas for 9 percent of total fuels consumed (calculated on Btu content) in major anthracite sales areas.  Comparative data for 1964 indicated a market decline for anthracite to 8 percent of the total and rise of fuel oil and natural gas to 64 to 28 percent, respectively.  The tonnage of anthracite consumed in these markets decreased from 33 million tons in 1950 to 13 million tons in 1964.  The chief components in this decline were retail dealer deliveries, mainly for home heating, and consumption by electric utilities.  Retail dealer deliveries (not including sales in the producing region) decreased from 13 million tons in 1955 to 3 million tons in 1964, while consumption by electric utilities fell from 3 million tons to 2 million during the same period.

The loss of anthracite markets is reflected in a decline in employment from a peak of 180,000 in 1914, to 13,144 in 1964; the net decrease of 167,000 employees has had a drastic effect on the local economy.  During the 1945-64 period alone, employment decreased 59,698.

Nonmetals and Construction Materials

The critical role which the mineral fuels have played in the decline of the Appalachian mineral industry should not obscure the growth of the nonmetallic minerals and construction materials industries.  Although a variety of materials are produced, stone (crushed stone, dimension stone, and cement limestone) and sand and gravel are the most important in terms of dollar value, and have tripled their share of the mineral economy since 1945.  Production of nonmetallics and construction materials increased at an annual rate of 4.9 percent.  Stone and sand and gravel increased annually at the rate of 6.2 percent and 3.3 percent respectively.

The production history of the crushed stone industry in Appalachia is one of overall growth, with occasional decreases in output that coincide with the national industry trend.  Production rose from 24 million short tons valued at $37 million (in 1958 constant dollars) in 1945 to an output of 92 million tons valued at $148 million (1958 constant dollars) in 1964.  During the 1945-64 period, the crushed stone quarries in Appalachia accounted for 13 percent of national production and 15 percent of the value.

Several factors have stimulated the growth in the demand for crushed stone.  Increasing national population has brought about the need for more roads, buildings, factories, and other facilities requiring crushed stone as concrete aggregate.  Greater construction activity and the declining use of dimension stone also have increased the demand for crushed stone used in manufacturing cement.  The growth demand for steel has contributed to the increased demand for metallurgical limestone, there has also been a growing use of crushed limestone ton neutralize acid soils and thus boost farm productivity.

Similarly, the growth in population and construction activity have spurred the growth of the sand and gravel industry.  Appalachian sand and gravel output increased from 12 million tons valued at $18 million (in 1958 constant dollars) in 1945 to an all-time high of 31 million tons with a value of $50 million (in 1958 constant dollars) in 1964.  Appalachian sand and gravel constituted 4 percent and 7 percent of national production and value, respectively, during the 1945-64 period.

Metals

Iron ore, copper, gold, and zinc are the only metal commodities that have been produced in Appalachia in significant quantities.  Of these, only zinc is now produced in large amounts.  Iron ore of Appalachia was an important factor in the development of the early iron and steel industry of the United states, but in 1964 Appalachian iron ore was being utilized only at Birmingham, Ala.  Copper has been produced at many mines of which those of the Ducktown district of Tennessee, opened in 1843, are the only ones that continued to produce into the 1960's.  Substantial amounts of gold were produced in the late 19th century and early 20th century when the rich deposits were mined out.  In 1964 only a small amount of gold was produced as byproduct of the Ducktown copper ores.


 

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