Byline: Peter Gray
An awful lot of folks from all walks of life have been traipsing around the wilds of West Virginia, Virginia and Kentucky for some months now. The story goes in West Virginia that they used to shoot revenuers, government men, bankers-all such types. These days, however, mine owners and operators are getting quite used to the sight of a black Cadillac Escalade or Lincoln Navigator filled with "suits" pulling up the drive of coal mining sites in Central Appalachia.
Indeed, it has been a long time since coal mining in the United States was this fashionable. What a difference a few short months can make, although some well reported events, such as floods in Queensland, continuing port bottlenecks and supply disruption certainly helped the cause. All of a sudden, and somewhat unexpectedly, coal is again experiencing a period of relative prosperity, and it appears that for the near-term, the outlook will continue to shine as brightly as many of its traditionally more attractive (and "shinier") commodity counterparts-aluminum, nickel, copper, and gold. As a consequence, there is no shortage of suitors seeking deals in the space.
Filling up the dance card
The flurry of merger and acquisition activity in eastern coal across the Appalachian basin and extending into the Pennsylvania seams in 2008 is somewhat representative of a cyclical trend. To be sure, consolidation has happened before, but this time around, there are some stark differences.
According to research published by Hill Associates (a Wood McKenzie Company) in its 2007 Central Appalachian Coal Supply study, "consolidation of the eastern coal industry that was so robust in the early …