Re: Shipping Coal - How Far?


Allen Montgomery
 

There are plenty of examples of a railroad or mining company buying coal bearing land just to reduce the price for the company. It didn't matter how far away it was if they could mine it cheaper themselves. My favorite example is the Phelps Dodge Company, who owned copper mines in Arizona. They were being eaten alive by shipping coal for their smelters. The cheap solution? Their railroad, the El Paso and Southwestern built a line from El Paso up to Dawson, New Mexico. Building a line across the state just to haul their own coal was cheaper than paying the SP to ship it to them. The outcome of that was that the Rock Island built from Oklahoma to Santa Rosa, where the EP & SW veered off to the northwest. Now the EP & SW had a bridge route all the way to Tucson. There was nothing to stop them from building the rest of the way to California. The SP was so threatened by this that they bought the whole railroad at top dollar. An incredible cost just to limit the competition. And the whole thing started because of the cost of coal.
Allen Montgomery
P.S. They still haul coal up to Morenci, Arizona in low gondolas. The grade from Clifton to the mine is too steep to use hoppers or bathtubs.


On Monday, February 27, 2017 1:04 AM, "Tony Thompson tony@... [STMFC]" wrote:


 
I get it that the coal suppliers (mines/etc.) priced by the BTU.

    Yes, but also by composition: percentage ash, content of sulfur and other undesirables, coking potential, etc. Coal is definitely not just coal.

Tony Thompson             Editor, Signature Press, Berkeley, CA
2906 Forest Ave., Berkeley, CA 94705         www.signaturepress.com
(510) 540-6538; e-mail, tony@...
Publishers of books on railroad history







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