Amidst all the doom and gloom, there were a couple of related articles in the FT today:
"Rising prices fuel unexpected renaissance in British coal"
The renaissance of UK coal is the result of a steep rise in world prices, caused by soaring oil and gas prices and a growing demand for electricity in the developing world. It is once again profitable to mine many of the UK's deposits and power companies are increasingly choosing local coal because of concern about shortages in the international market. Several power companies have indicated they will import less foreign coal and rely more on local supplies. In July, Scottish Power signed a deal with Scottish Coal to buy 2m tonnes a year - half of its output - for the next five years, which the mining group said would lead to the opening of new open-cast pits and more than 100 new jobs.
"Rising fuel prices give Welsh mines new lease of life"
The Unity Mine at Cwmgwrach in the Neath Valley closed 12 years ago. Now it is back in business, thanks to spiralling world energy prices. Around 220m away from the tunnel's end lies a 3m deep seam of high-quality coal. Processed for specialised industrial use, it could be worth as much as £300 a tonne - making miners on £30,000 a year eligible for bonuses that will double or triple their pay.
Don't forget that the UK coal industry went so horribly wrong last time because it was nationalised, unionised, subsidised and politicised. Unlike oil and gas production which is privately-owned and taxed to within an inch of its life, but is still going strong. If there is a threat to UK oil and gas (or coal, for that matter), it's the MMGW and windfall tax nonsense - maybe that's the real threat, the politicisation, if that's an actual word.
As long as we learn those lessons, it will all be fine.
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6 comments:
"Don't forget that the UK coal industry went so horribly wrong last time because it was nationalised, unionised, subsidised and politicised."
Yes, it's actually something of a miracle that it managed to survive as long as it did because those problems went back at least to the inter war era.
There was am intersting Radio programme on earlier this year about the nationalisation of the mines. The unions pressed Labour for years to nationalise it and succeeded in 1946.
Apparently, once it was nationalised the Govt approached the unions about their plans and the response was they had none, that wasn't their job and all they wanted was it nationalised!
From a professional perspective it is interesting to note that it is two rather particular types of coal mining that are featured.
The Scottish deal hinges around open cast coal mining which was never a major part of the NCB's operations (not enough employment for The Brothers), indeed there were times when the NUM wanted the Opencast Executive closed down. I am surprised the greenies have let it pass though.
The news from Wales seems to concern specialised, very high quality coal (presumably coking coal). Again, specialised coal was never a huge part of the NCB's operations, that organisation prefering massive, Soviet style deals for steam coal.
I doubt this marks a resurgence of the UK coal industry to anything like its former size, but still it's good to see. Like you say: Let's just hope the NUM and the state don't stuff everything up.
It can't be long before miners are out on strike demanding higher pay again...
Lawyers will also be delighted as it will ensure plenty more sick former miners in years to come...
Snafu, there is a high correlation between the nationalised/State sector, unionisation and strikes.
If there are lots of different private mining operations, some owned by co-operatives or with fat bonuses for meeting targets, strikes will be much less of a problem.
It will be interesting to see what happens with previously defunct coal fields, all the deepcast mine shafts in my hometown were capped with concrete, once they stop getting pumped out they fill up with water so they can't just be left around.
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