Coal – KOL is the VanEck Vectors Coal ETF. It seeks investment results that correspond to the MVIS Global Coal Index. It.has broken important resistance at the $14 level and spent the last week consolidating around $14.50. There was resistance around $14 because this is the level that it was trading at in early 2015 before it crashed more than -60% in just six months. Since the lows early last year it has appreciated more than +160%. It is now overbought so if it sells off there will probably be support at $14.
About 300 million years ago, plants and trees grew in swamps that covered much of the earth. As this vegetation died, it drifted down to the bottom of the swamps and formed peat, a soggy, spongelike material. The peat became buried and compressed under the earth’s surface over a long period of time. Over millions of years and through the forces of heat and pressure, the peat became coal. Check out this photo of a coal deposit near Gillette, Wyoming. Notice the truck in the lower corner.
Some of the newest coal is only 1 million years old, and coal is still being formed. In fact, some regions in the United States—such as the Great Dismal Swamp in North Carolina and Virginia, the Okefenokee Swamp in Georgia, and the Everglades in Florida—offer good coal-producing conditions today. As their plant life dies and is covered by silt, sand, and other materials, new coal beds may form.
Coal is classified into four categories, or ranks, based on how it responded to increasing heat and pressure beneath the earth’s surface and according to how much carbon it contains. Harder coals were formed under greater heat and pressure. The harder the coal, the less moisture it has and the more efficient it is when used as fuel. Carbon is the ancient plant material that gives coal most of its energy. The four types of coal are as follows:
Lignite (soft). This type of coal contains a lot of moisture and breaks apart easily. Of the four types, lignite contains the least amount of carbon. Also called brown coal, lignite is used mainly at electricity-generating plants. Lignite has unique properties that make it especially suitable for coal gasification, or creation of volatile gas useful as boiler fuel or for home heating. To Learn More about lignite click here.
Subbituminous (medium-soft). This type of coal has less moisture than lignite. Subbituminous coal is generally used to produce steam for electricity generation. Reserves of subbituminous coal are found mostly in the western United States and Alaska.
Bituminous (medium-hard). This type of coal, which contains very little moisture, has high heat value. It is used to generate electricity and to produce coke, a coal residue used in the steel industry. Bituminous coal is the most plentiful type in the United States.
Anthracite (hard). This type of coal has the highest carbon content. Anthracite burns slowly and makes a good heating fuel for homes. The United States has about 7.3 billion tons of anthracite, most of which can be found in Pennsylvania.
There are two basic ways to remove coal from the earth: (1) surface mining for coal that is close to the surface or on hillsides, and (2) underground, or deep, mining for coal that is far beneath the earth’s surface.
In surface mining, the topsoil and subsoil are removed and set aside to be used later in reclaiming the land. Machines that remove the earth and rock (including draglines, wheel excavators, and large shovels) are used to uncover the coal. This removed material is called overburden. Next, the coal is broken into manageable sizes, usually by explosives. Then, the coal is removed and loaded into trucks. Finally, the area is refilled with the overburden, covered with the soils that were removed, and reseeded for vegetation. To the extent possible, the area is restored to its original condition or improved.
In underground mining, two openings called shafts are drilled into the coal bed—one to transport miners and equipment, and the other to bring coal to the surface. Next, the coal is broken into manageable sizes. One means of breaking the coal is the use of explosives. Another is the use of continuous miners, machines with large, rotating cutters that break into the coal and mechanical arms that scoop the coal onto a built-in conveyor. Still another method is the use of longwall mining machines, which cut along walls of coal up to 1,000 feet in length and drop the coal onto a conveyor belt. Then, the coal is brought to the surface by elevators, conveyor belts, or coal cars.