Coal news and updates

Global demand for coking coal set to revive Cumbria mining

Two years after Britain’s last deep coal mine closed, a £200m project in Cumbria wants to revive the industry.

West Cumbria Mining (WCM) plans to extract high value metallurgical — or coking — coal used for steelmaking rather than the cheaper version used in power stations.

It will use existing tunnels at a disused drift mine to access undersea resources off the coast of St Bees Head, just south of Whitehaven. Mark Kirkbride, chief executive, said the mine could open by the end of 2019.

“Metallurgical coal was the best performing commodity of 2016,” said Mr Kirkbride. “There is no source of it in Europe.” Poland produces some lower grade coking coal. Prices leapt to $300 a ton but have since slipped back as China ramps up production.

He is budgeting for $120 a ton initially and $140 over the long term. Production costs would be $57 a ton.

The mine has said it will employ more than 500 people and export around 80 per cent of its output. Helen Davies, a spokeswoman, said that it would reduce the area’s dependence on Sellafield, the nuclear reprocessing plant for jobs.

“We have had 95 per cent support from the local community in responses to our consultations. Some 1,600 people have registered an interest in jobs. They include over 80 with experience underground. They really want to teach a new generation,” she said.

None of the 31 statutory bodies that must be consulted, such as the National Trust, has yet objected, though the planning process has only recently begun.

Mr Kirkbride said environmental groups should back the plan. “Some have said we shouldn’t be using fossil fuels but you have to have metallurgical coal to produce the steel to make the wind turbines.”

Kellingley, the UK’s last pit, shut in 2015 and renewable sources now generate more energy than coal.

The Woodhouse colliery would be the first to open in the UK since Asfordby in Leicestershire in 1987. Before the pit closures and strikes of 1984-85 there were 169 pits employing 139,000.

New Age Exploration, another Australian company, is drilling test holes for a drift mine for coking coal near the Scottish border town of Gretna.

The Woodhouse site is former chemical works that once mined anhydrite for use in construction materials. It is near the Haig colliery, whose winding gear and engine house remain as a monument to the coal industry. It closed in 1986.

WCM is majority owned by EMR Capital, an Australian private equity fund. It has spent £20m so far on planning and research. EMR is expected to put in up to £80m and raise another £120m in debt to fund the construction.

A large, low, dome-shaped building will house the two tunnel entrances, coal processing and storage facilities. A 2.5km tunnel with a conveyor belt would take it to a train loading facility. Six trains a day would take it to Redcar for shipping overseas or to the UK’s two remaining steelmaking plants at Port Talbot and Scunthorpe.

WCM has commitments from European steelmakers to take 500,000 tonnes a year. They rely on imports mainly from Australia and the US. Mr Kirkbride said: “The mine will have a life of at least 50 years. We have to get over our hangover in this country. There is a future for coal.”

Source; Financial Times