Coal news and updates

Thirty years on from a strike that became a defining moment in 1980s Britain, the country’s coal industry is a much reduced rump, struggling for a role in a world trying to leave carbon behind.

On the eve of the strike – which lasted a year after being declared a national stoppage on March 12 1984 – Britain’s coal industry produced 120m tonnes a year and employed almost 150,000 miners in 170 pits, most working deep underground.

Today’s UK coal industry has just 6,000 workers and 17m tonnes of annual output. Only three deep-level mines remain. Kellingley in Nottinghamshire this year recruited nine apprentices – its first for four years.

 

 

“In the UK, deep mining will disappear within the next 10 years – no one is going to spend what it takes to open shafts,” says Gordon Banham, chief executive of Hargreaves Services, the UK’s largest listed mining company. Maltby, Hargreaves’ last deep-level mine, closed last year.

UK Coal, the successor to the nationalised industry that existed at the time of the strike, was put into administration last year and after restructuring is now operated by an employees’ benefit trust.

Today, most coal is extracted from surface-level open pits in places such as Northumberland, where at one mine the earth scraped away has been sculpted into a recumbent female figure, a landmark to replace colliery winding gear and pit heaps. Companies such as Hargreaves are still opening opencast sites.

Dieter Helm, professor of energy policy at the University of Oxford, believes the pit closure programme that sparked the 1984 strike – and which was later deepened to leave fewer than 20 pits at the time of privatisation a decade later – was economically justified.

Within a short while a surge in cheap natural gas changed industry economics, he says. “They [the government] were even more right than they thought at the time.”

Britain still sits atop significant coal resources and the development of technology such as underground coal gasification – along with carbon capture and storage – would undoubtedly spur new interest in their exploitation. “That would be a disruptive technology,” Mr Helm says.

Today’s issues with government are about the place of coal in energy generation. Coal generates about 40 per cent of UK energy, with most imported from places such as the US. The exploitation of cheap shale gas has displaced US coal into export markets, cutting world prices and reinforcing coal’s place as a cost-effective source of energy.

But that conflicts with national and international attempts to limit carbon emissions by taking coal generation out of the energy mix. Some UK power stations are stepping up burning coal before tougher limits on its use kick in, further displacing gas.

Concern has mounted that UK efforts to promote low-carbon energy are hampering competitiveness and leading to higher household bills. Mr Banham questions why Britain wants to be “so far ahead of the rest of the world” in eliminating coal-fired generation.

In next week’s Budget, George Osborne, the chancellor, is widely expected to freeze the “carbon price floor”, a tax on fossil fuels, at its announced 2015 level. But Coalpro, representing UK coal producers, wants a freeze at a lower price, saying the remaining coal industry is otherwise in danger because power generators will not commit to contracts to use coal.

“Getting coal off the grid as soon as possible makes energy more expensive, and you lose the diversity of the generation mix . . . Security of supply and affordability have been placed behind carbon emissions targets,” says Phil Garner, director-general of Coalpro. “We should be trying to secure as much of our indigenous resources as possible.”

 

Source: ft.com