Economic Impact

 

The Kentucky coal industry:

  • employed 15,012 miners earning over $759 million in wages during 2004.
  • created a total of 61,158 jobs statewide.
  • paid over $183.94 million in severance taxes during FY 2004-05 and generated total state tax revenues of about $528.3 million.
  • was a $4.13 billion industry which brought into Kentucky receipts totaling about $3.25 billion from 23 states and 4 countries in FY 2004-05.
  • created economic activity throughout Kentucky totaling $8.97 billion.
  • *NOTE: Estimated values of coal sold in each state are based upon average per ton gross value of coal produced and processed.


    2004
    Estimated Distribution of $4.13 Billion

    Of the $4.13 billion in receipts from coal produced and processed, the largest part, 36%, went to miners' wages and benefits.  Another 33% went to operating costs, including fuel, materials, maintenance, etc.  The remaining 31% is broken down as follows:  depreciation (7%), taxes (7%), royalties (6%), net income (6%), and general administration (5%).


    2004 Estimated Impact of $4.13 Billion

    The $4.13 billion in receipts from coal produced and processed in Kentucky in 2004 generated additional economic activity totaling $4.84 billion and 46,146 jobs.  This additional economic activity plus coal production and processing yielded total economic activity in Kentucky of $8.97 billion and 61,158 jobs.


    Benefits Throughout the Kentucky Economy

    Due to the economic impact of the coal industry throughout Kentucky in 2004, in addition to 15,012 persons working at the mines, 6,021 persons worked in factories making everything from mining equipment to home appliances; 2,617 persons drove coal trucks and cargo trucks, worked at rail yards, etc.; 12,704 persons worked in warehouses, sold clothing, appliances, furniture, in retail stores, etc.; 12,470 persons worked in banks, law offices, engineering firms, accounting firms, and other service businesses; 4,366 persons built homes, offices, factories, and highways; and 7,968 others were teachers, government officials, and a wide variety of other professions and occupations.

    Source:  Updated from the University of Kentucky Center for Business and Economic Research. Economic Impact Analysis of Coal in Kentucky, (1995) to 2004 by Haywood and Baldwin.
     

    Economic Impacts of All Mining Nationwide

    The mining of coal, metals, and industrial minerals creates value by taking natural resources found in the Earthís crust, removing them from their natural setting, and converting them into products useful to human beings.

    Mining literally takes a part of nature that has little or no economic value and creates something of value from it.  The output of mining, therefore, constitutes created valueThe payments made by others, by which the mining industry disburses that created value, form a net addition to the stream of income in the economy.

    A study for the National Mining Association found that in 1995, the American mining industries (coal mining, metal mining, and industrial minerals mining) had a combined direct and indirect impact on the economy of the United States.  That sum included combined direct and indirect contributions personal income, business income, federal government revenues and state and local government revenues.

    The total benefit to the nationís economy was nearly nine times the value of the solid minerals that were mined in the United States that year.  The total number of American jobs created both directly and indirectly by the domestic mining industry was more than 15 times the number of workers directly involved in mining.  And the total personal income generated from mining was enough to pay the wages of nearly five million American workers, only six percent of whom were actually employed in mining.

    A major finding of the study was that people don't have to live in a mining state or work directly in the mining industry to benefit from mining.  All 50 states benefit from mining.

    Source:  National Mining Association, Mining and the American Economy - Economy - Everything Begins with Mining, July 1997.