Coal exports are on the rise Turning to the U.S. With worldwide demand for coal on the rise, there's a surge in exporting, which means good business for the port of Baltimore.

November 24, 1995|By Suzanne Wooton | Suzanne Wooton,SUN STAFF

The piles of coal, visible from Interstate 95 in Southeast Baltimore, rise higher than ever. Every other day, 75,000 tons or more spew into the belly of a coal ship destined for the power plants of Europe, the Mideast or the Pacific Rim.

So far this year, coal terminals at the Port of Baltimore have exported 11.2 million tons on 150 vessels, compared to 6.7 million tons on 100 ships during the same period in 1994. That's putting the port on a pace to exceed its record of 13.3 million tons exported in 1981.

The surge stems from a rebounding world economy and the growing need for steam coal that is used to produce electricity. ++ Traditional sources of coal around the world have quickly been exhausted by the heavy demand, coal experts say.

"The supplies around the world, mainly in South Africa and DTC Australia, are committed," said Richard Foster, vice president of bulk commodities for John S. Connor Inc., a shipping agent in Baltimore.

"The world has turned once again to the old reliable -- the U.S," he said.

In addition, ocean freight rates have reached near-record levels, prompting coal buyers in Europe to minimize their cost of transporting coal by looking for sources closer to home.

With increasingly sophisticated ability to scrub coal, overseas power plants have become much more receptive to America's mid-Sulphur coal, according to Gary Dadisman, general manager the Consolidation Coal Sales Co. terminal in Canton. The company is a division of Consol Inc., a Pittsburgh-based coal mining company that produces over 70 million tons a year.

Consolidation is one of three terminals in Baltimore -- including Curtis Bay and Bayside -- though it handles more than 90 percent of all exported coal here. Unlike the other terminals, it receives coal by two railroads, CSX and Conrail.

The coal export trend in Baltimore has been seen elsewhere with overseas shipments up substantially in 1995. During the first eight months, the U.S. shipped 55.9 million tons of coal, compared wiht 45.1 million tons for the same period in 1994, according to the National Mining Association in Washington, D.C., which represents coal producers.

At Consolidation, coal loading goes on 24 hours a day, year-round. A bucket wheel reclaimer digs coal from huge stockpiles and empties it onto a conveyor belt destined for a waiting ship at the berth. There, it's fed onto another conveyor, which moves the coal to a chute that feeds it into the ship's cargo hold. The continuous feeding operation can load 6,000 tons an hour.

Coal is the single largest commodity moving through the port. But, because the process is so mechanized, it requires far fewer workers than handling containers and other cargo. But the increased number of ships coming to Baltimore is an economic boon for many in the port, including bay pilots, tugboat operators, line handlers, ship agents and repair companies. Expenses for one coal ship docking here can range from $30,000 $50,000.

"It's not as great for manpower on the piers, but there's tremendous economic spinoff with coal," said Lou LoBianco, manager of break bulk and bulk carrier sales for the Maryland Port Administration, which operates the state's five public terminals.

"There are so many jobs related to coal," he said. "And it's not just at the port, but with the railroad, reaching all the way back to the fields. You're talking several thousand jobs directly related to moving coal."

Baltimore's coal terminals were built with private funds and are operated by private companies. The state has concentrated its hundreds of millions of investment dollars on terminals and facilities that handle general cargo such as containers, automobiles and heavy equipment.

Yet one of the most significant expenditures of public funds -- the $237 million dredging of the channels from 42 feet to 50 feet -- has benefited coal ships almost exclusively thus far. The deeper channel system allows those ships to carry more coal.

Historically, coal exports have been up and down at the port. A boom in the late '70s and early '80s was replaced by a long downside. But in 1991, the coal exported here surged by nearly 3 million tons after Consolidation closed its terminal in Philadelphia and routed that coal through Baltimore.

Coal producers predict the demand for steam coal will continue to rise over the next several years.

"Electrical demand tracks closely with the strength of world economies," says Mr. Dadisman.

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