By John McFerrin, West Virginia Highlands Conservancy
Metallurgical coal is having a moment right now. After years of being just the less common type of coal, it is being elevated to “critical mineral” and “critical material” with all the rights and benefits accruing thereto. Since 46% of the metallurgical coal in the United States is in West Virginia, West Virginia is having a moment as well. The largest consumer of metallurgical coal is China; the largest consumer of metallurgical coal from the United States is India.
There are, in general, two types of coal. One is called “thermal” or “steam” coal. Although it is sometimes used to heat buildings directly, its most common use is to make electricity.
The other type of coal is “metallurgical” or “met” coal. Although it is occasionally used to make electricity, by far its most common use is to make steel. It has properties that make it good for making coke which is used to make steel.
The first part of met coal’s moment came in the Big Beautiful Bill. Although the most visible parts of that bill were the cuts to food stamps and Medicaid and the tax cuts, there were less discussed provisions. As the late, great John Wayne used to say (in more colorful language), it’s the ones you do not see that get you.
The Big Beautiful Bill designates metallurgical coal as a “critical mineral.” The United States Department of Energy had previously added metallurgical coal to its Critical Materials List. This entitles those who mine metallurgical coal to a tax credit of 2.5% of the cost of mining. This credit applies whether the coal is used domestically or exported.
The nominal policy behind the Critical Materials list is that there are some materials which are critical to our national defense. It is important that the United States have a domestic supply so that, in times of emergency, we do not run out. Steel is important to national defense, metallurgical coal is important to make steel, so it follows, as the night the day, that metallurgical coal must be important to our national defense.
The second part of metallurgical coal’s big moment comes in a proposal to have it added to a more general list of critical minerals. The proposal, which is not yet final, would add metallurgical coal to a list that already contains such minerals as samarium, rhodium, lutetium, terbium, dysprosium, gallium, germanium, gadolinium, tungsten and niobium (54 minerals in all).
Being on the Critical Minerals list is the golden ticket of American public policy. Anything on the list is eligible for some kinds of funding and tax credits as well as a streamlined permitting process.
While metallurgical coal is already in the Big Beautiful Bill, its inclusion on the more general Critical Minerals list is pending. The West Virginia Highlands Conservancy has joined with several other groups in opposing the addition of metallurgical coal to the Critical Minerals list.
WVHC opposed the addition of metallurgical coal to the list because there is nothing about it that justifies that status.
We do not need metallurgical coal to make steel. To the extent that we need metallurgical coal, we are producing much more than we need for domestic steelmaking.
The steel made in the United States is made in one of two ways: (1) making new steel by processing iron with the addition of carbon; (2) taking previously used steel, melting it down, and making it into new steel. In the United States, 70% of our steel comes from previously used steel. According to the Steel Manufacturers Association, that will increase to 90% by 2040.
Melting down scrap steel and making new steel does not require metallurgical coal. It is done by an entirely different process.
At present, metallurgical coal is used to make most of the steel that is made by processing coal, etc. It does not, however, have to be like that. There is currently available technology that can make steel from iron ore using methane or even hydrogen as a fuel.
Even if metallurgical coal were necessary to make steel, there still is no reason to justify hoarding our supply for national security reasons. We have way more than we need or use. According to the United States Energy Information Administration, the United States exports 76% of the metallurgical coal that it produces. It is not necessary for the United States to give tax breaks, special financing, streamlined permitting, etc. to keep us from running out. If our national security ever requires that we have more metallurgical coal, we can stop exporting some of it.
The tax credit in the Big Beautiful Bill for metallurgical coal expires in 2029. It is about time for whatever lobbyist was responsible for having the credit included in the bill to start working on an extension.
