, who built a company from distressed U.S. coal assets and sold
it last year for $3.4 billion, says the industry's current slump
differs from earlier setbacks and may last for years because of
the shale-gas boom.
A combination of cheaper natural gas, environmental regulations
and a mild winter has spurred the closure of mines and the loss
of thousands of mining jobs in the U.S. Domestic demand is at a
24-year low and the fuel has lost its status as the leading
source of electricity, with gas accounting for the same share for
the first time in at least four decades.
Ross, 74, started International Coal Group Inc. after buying
Horizon Natural Resources Co., a mining company that went
bankrupt 10 years ago amid a recession. While St. Louis-based
Patriot Coal Corp. (
) filed for bankruptcy protection last week, he doesn't see any
immediate buying opportunities.
"Last time the cycle was this bad, the problems were essentially
just cyclical," Ross said in a July 10 e-mailed response to
questions. "This time the major secular trends are far more
likely to be unfavorable for years to come."
Ross says the biggest pressure on the U.S. coal is gas, the
supply of which has risen along with the increase in hydraulic
fracturing of shale rock. Output will climb 4.2 percent to a
daily average of 69 billion cubic feet this year on higher
production from deposits such as the Marcellus shale in the
Eastern U.S., according to the Energy Department's July 10
Short-Term Energy outlook.
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