Around the turn of the millennium, hedge fund investors put an audacious bet on coal mining in the US. The bet failed – but it was the workers and the environment that paid the price
Once or twice a generation, Americans rediscover Appalachia. Sometimes, they come to it through caricature – the cartoon strip Li’l Abner or the child beauty pageant star Honey Boo Boo or, more recently, Buckwild, a reality show about West Virginia teenagers, which MTV broadcast with subtitles. Occasionally, the encounter is more compassionate. In 1962, the social critic Michael Harrington published The Other America, which called attention to what he described as a “vicious circle of poverty” that “twists and deforms the spirit”.
Around the turn of this century, hedge funds in New York and its environs took a growing interest in coalmines. Coal never had huge appeal to Wall Street investors – mines were dirty, old-fashioned and bound up by union contracts that made them difficult to buy and sell. But in the late 1990s, the growing economies of Asia began to consume more and more energy, which investors predicted would drive up demand halfway around the world, in Appalachia. In 1997, the Hobet mine, a 25-year-old operation in rural West Virginia, was acquired for the first time by a public company, Arch Coal. It embarked on a major expansion, dynamiting mountaintops and dumping the debris into rivers and streams. As the Hobet mine grew, it consumed the ridges and communities around it. Seen from the air, the mine came to resemble a giant grey amoeba – 22 miles from end to end – eating its way across the mountains.