The fallen giant

Britain's coal mining industry is shrinking almost to the point of extinction. Will a Labour Government allow it to die? Peter Lazenby reports.

WHEN Steve Kemp took over leadership of the National Union of Mineworkers on August 1 he knew he faced the hardest struggle of his life.

All that remains of the once-mighty British coal industry is a rump. The run-down of the industry after the miners' defeat in the strike against pit closures in 1984-85 has left just 16 pits where 30 years ago there were more than 200.

The workforce of 200,000 is down to 5,000.

The last pit in West Yorkshire, the Prince of Wales colliery at Pontefract, ceased production at the end of August.

Even worse, just two weeks before Steve Kemp took over leadership of the NUM, the owner of most of the privatised coal industry, UK Coal, announced the forthcoming closure of the jewel in the industry's crown – the Selby coalfield.

With Selby will go over one-third of the industry's remaining jobs – 2,000 miners have been told that by early 2004 they will be joining the tens of thousands who have gone before on to the employment scrapheap.

At the pit-head there were literally tears as the news sank in.

Now more pit closures loom, with the prospect that the number of pits left will be in single figures in the next five years.

To Steve Kemp it is not only a tragedy for his members. The decimation of the coal industry is an act of economic insanity and short-termism which will cause future generations to curse.

Britain, sitting on coal reserves which could guarantee the country's energy needs for 200 years, is abandoning them.

Coal-fired power today accounts for less than 40 per cent of Britain's electricity consumption. Gas-fired power is coming up from behind – Britain is consuming its own gas reserves at three times the rate more can be found. Gas which could guarantee domestic supplies for decades is being burned in vast quantities to make electricity, meaning dependence on imported gas supplies is increasing fast.

Estimates vary on the growth of dependency on imported gas, but it is likely that within 20 years gas will be creating 70 per cent of Britain's electricity, and 90 per cent of that gas will be imported.

Unstable

The vulnerability, says Mr Kemp, is frightening. Britain will rely for its energy needs on fuel carried by pipeline from and through some of the world's most unstable regions – eastern Europe, the Middle East, Africa.

Nuclear power, currently providing 20 per cent of Britain's electricity, is bankrupt both financially and in terms of public confidence. It continues to cost billions of pounds in public subsidies – a fraction of which would guarantee the future of the mining industry.

Then there are cheap coal imports, steadily eating into Britain's shrinking market for power station coal. The Government is drawing up a blueprint for Britain's energy industry for the next half century – the Energy White Paper. It will appear in spring.

But so far there is no sign that the Government is considering implementing the plan favoured by the NUM – the taking back of the coal industry into public ownership, and the investment of the millions needed to develop clean-burning coal technology and the exploitation of new reserves.

Evidence

The National Union of Mineworkers is one of the organisations which submitted evidence. Its concern stretches beyond the welfare of its own dwindling membership.

Mr Kemp said: "Should we lose our own coal industry the ramifications for the people of Britain will be terrible."

The Government is giving little away, but the signs are not good.

In February this year a Trade and Industry Select Committee report on security of supply of energy resources said: "Even if coal-fired generation continues, that does not necessarily guarantee a long-term future for coal production in this country. Existing pits are becoming exhausted, new deep mines are expensive to sink and the move to short-term supply contracts since electricity privatisation does not give the confidence necessary to make such long-term investment."

The NUM is campaigning for retention of the Selby coalfield but its options are limited.

Industrial muscle in the coal mining industry is a thing of the past. The union is currently relying on Parliamentary action through the group of MPs whose constituencies have coal mining interests.

THE biggest owner of deep coal mines in Britain is UK Coal.

It runs 13 of the 16 deep mines left in Britain.

The company admits the industry's future is bleak. It envisages that within a few years it could be running just five pits. "It is definitely coal at the crossroads," said the firm's spokesman, Stuart Oliver. "Or even at the precipice."

The company has been losing 30m a year at Selby alone.

In August it announced production would cease early in 2004 with the loss of Selby's four pits and 2,000 jobs. In the same month Prince of Wales colliery at Pontefract shut – West Yorkshire's last pit.

Harworth outside Doncaster and Maltby near Rotherham are likely to be next with the loss of another 1,000 mining jobs. Production at Clipstone colliery in Nottinghamshire will cease when UK Coal's lease on the pit runs out in March next year. Ellington in the North East has just five years' life left.

All that will be left of UK Coal's operations will be Kellingley – the "superpit" classed as being just over the border in North Yorkshire – Rossington in South Yorkshire, Thoresby and Wellbeck in Nottinghamshire and Daw Mill in the Midlands.

Three other pits not owned by UK Coal also remain – Richard Budge's operation at Hatfield in South Yorkshire and two independent collieries in Wales: Tower and Betwys.

At Selby and in the rest of the industry money and market forces are the dominating factors.

Coal prices are measured against the amount of energy the fuel produces – gigajoules.

"We mine coal at 1.31p a gigajoule. You can buy foreign coal on the quayside at Humberside for less than 1 a gigajoule," said Stuart Oliver. "That is the reality."

The foreign coal comes mainly from the United States, Colombia and South Africa, which enjoy shallower mines, better geological conditions and, in the case of the latter two, much lower wages.

"Our lads do remarkably well, but they are not mining in anything like the conditions enjoyed in other parts of the world," said Stuart Oliver.

As if cheap coal imports and increasing use of gas to make electricity were not enough, the industry's situation is poised to become even worse. Limited subsidies granted to the industry by the British Government through a sympathetic interpretation of European subsidy laws run out in December. Although UK Coal used up its allocation of subsidies 18 months ago, the aid helped.

It is to be replaced by an even less generous investment grant scheme.

To UK Coal the economics are pretty simple.

Stuart Oliver said: "Selby has cost horrendous amounts of money – 30m a year over the last three years – and the longer we mine it the more the losses will increase."

Abandoned

He accepts that millions of tonnes in reserves will be abandoned, but says the cost of extracting the coal is simply too high, mainly due to geological conditions – almost a million tonnes in reserves were recently lost through unexpected geological problems, the difficulties mother nature is throwing up, as he puts it, "even as Selby is in its death throes."

"At the end of the day when people buy coal they are not bothered about who mined it or where it was mined, whether it was deep mined or opencast. They are buying energy," he said.

The only pit with a long-term future is Kellingley at Knottingley, near Pontefract. "Kellingley is a different kettle of fish. It can play an important role for decades to come," said Stuart Oliver.

peter.lazenby@ypn.co.uk

FACTFILE

where the axe is poised

• Selby coalfield is to close in spring, 2004, shutting Wistow, Stillingfleet and Riccall pits, plus Gascoigne Wood where coal is brought to the surface.

• Maltby in South Yorks – under threat.

• Harworth in Notts – under threat but has reserves.

• Clipstone in Notts – to close in March next year.

• Wellbeck in Notts – probably 10 years life.

• Daw Mill, Midlands –10 years life then needs substantial investment.

• Thorseby in Notts – probably 10 years life

• Rossington in South Yorks has "substantial" reserves, and is safe for the moment.

• Ellington in the North East – five years life.

• Hatfield, Richard Budge's pit in South Yorkshire – has substantial reserves.

• Tower in Wales, independent mining anthracite. Safe for now.

• Betwys in Wales, independent and under threat.