Wednesday, December 19, 2012
Coalmining investor, John Baugues has taught us that access to high-quality coal resources is only one vein of smart coalmine development strategy that he uses. Another vein that for John Baugues, Jr. explores is the geographic location of the mine and its closeness to viable transportation venues. Transportation costs account for the majority of the overall costs of delivered coal, so the closer a mine is to efficient transportation venues, the more cost effective the mine will be. John Baugues, Jr. has gone after this vein of thinking in his choosing of mining investments, recognizing that location to rail is the key to safe, efficient, and swift transport of his coal both domestically and internationally. Baugues' Eastern Kentucky coal preparation location, for instance, focuses on it’s closeness to the CSX rail line, one of three Class I railroads in the Eastern United States with close proximity to numerous major cities, ports, and strategic steel mill locations. Coal from John Baugues Jr.' Appalachian facilities therefore connects its target destinations with ease and efficiency - and at a lower cost than coal shipments utilizing truck or barge transport as well. Additionally, they connect to multiple ports puts John Baugues' coal benefit the country's thriving coal export market. International demand for US coal is high and will continue to grow, and thanks to the location of his coal mines and preparation facilities, John Baugues, Jr. has a leg up on other competition in meeting that demand. The lesson: location, location, location. Proximity to rail transportation makes all the difference.