You often hear it in the news – decreasing coal demand as cleaner, renewable energy sources take over. But did you know steel-making coal is actually a booming market?
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When we hear about coal, most of us think of thermal coal, which is burned to make electricity powering our homes and businesses. Metallurgical or "coking" coal, however, is mined to produce the carbon used in making steel for buildings, tools and trains, as well as cookware, cutlery, and surgical tools. Approximately 70% of global steel production today uses metallurgical coal, according to the World Coal Association.
Union Pacific is primed to dig into this demand, and a recent customer win with Allegiance Coal proves just that. The railroad is onboarding its new metallurgical coal mine, New Elk Coal Mine near Jansen, Colorado, as part of a long-term agreement to export steel-making coal into the Asian and South American markets. Union Pacific anticipates shipping more than 8,000 carloads in the first 12 months.
The coal is transported by rail to seaborne ports for export, including Mexico’s Port of Los Guaymas. Union Pacific has traditionally moved auto parts and grains across the border – this venture shipping metallurgical coal brings a unique product for Union Pacific’s Mexico team.
"This success took cross-departmental engagement, relationship-building and market knowledge," said Kelli Sweet, director-Bulk, Marketing and Sales. "Through our tenacity, we secured a win for our company. There was strong teamwork between Operating and Marketing and Sales, with a special thanks to our train crews who take a lot of pride in securing and serving this business."
Last month, the team celebrated the first steel-making coal shipment out of New Elk Mine.
"Our Great Plains team is eager to efficiently serve the customer and take on this new growth," said LT Griffin, superintendent-Train Operations, Transportation, who was active in the process.