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Newsletter
October 2006
COAL INDUSTRY IN THE UKEvery year sees the closure of yet more of what pitifully few coal mines are now left in Britain. Figures compiled by the two government bodies resposible for coal – the Department of Trade and Industry (DTI) and the Coal Authority – reveal the true picture in all its horrors. Britain currently produces just 20 million tonnes of coal at home but uses 62 million tonnes in total. In other words, we are importing over 40 million tonnes despite having about 300 years of reserves under our very own ground. List of Major Deep Mines in Operation There were 7 major deep mines in production as at March 31st 2006.
Employment As at August 2006, the UK coal industry employed around 5,600 people, with approximately 4,000 employed in deep mines and the remainder in the opencast sector. The majority of jobs are in England (over 3,750 employees); Scotland has approx 1,100 and Wales about 750. Output In 2005, total UK production was 20 million tonnes, with 9.6 million tonnes from deep-mined production and opencast accounting for 10.4 million tonnes. Deep-mined output was 24% lower than in 2004 and 39% down on 2003 figures. This is mainly due to the closure of mines such as the Selby Complex, Betws and Ellington. Opencast output was down 13% in 2005 compared to 2004, having declined steadily from a peak of around 16.7 million tonnes in 1997. Trade Very little UK-produced coal (steam or anthracite) is exported. Figures shown that in recent years just over 0.5 million tonnes have been exported. Imports in 2005 rose to a record 44 million tonnes. This reflects continuing demand, particularly from the generating sector, when home production is declining. Major sources of imports include Russia, Australia, Colombia, South Africa and Indonesia. Demand Overall coal consumption in 2005 was up 2.3% at 61.8 million tonnes. Coal burn in major electricity generators, who accounted for over 80% of total coal use, was higher by 3% in 2005. Some 34% of electricity generated in 2005 came from coal. Demand for coal for generation has risen as coal has become more competitively priced compared to gas, which is the main alternative feedstock. Opencast/Deep mines As at 31 August 2006 there were 25 licensed opencast sites and 6 major deep mines in production. Coal prices Prices for internationally traded steam coal imported into North West Europe were around £25/tonne in 2003, but rose strongly in 2004 and peaked at £37/tonne. Between 2004 and 2005, international imported steam coal prices fell back to £32/tonne. Prices received by UK producers for sales to generators have been in the range £26/tonne to £29/tonne over the period 2003-05. UK Coal Production (up to 2016) Review In early 2004, the DTI commissioned a study to evaluate the potential for coal production up to 2016, with special consideration given to the likely demand for UK coal in the light of alternative approaches to implementing the Large Combustion Plants Directive (LCPD) (see 'Related Documents'). Please note that the final report of this study does not necessarily represent a DTI opinion. More information on the LCPD is available on the DEFRA website (see 'External Links'). State Aid 1. UK Coal Operating Aid Scheme (UKCOAS) Description The UK Coal Operating Aid Scheme was launched by DTI on 15 November 2000, having been approved by the European Commission on 26 July 2000. This scheme aimed to allow those elements of the UK coal industry with a viable future without aid to overcome short-term market problems (in particular, low world coal prices and the lifting of the stricter gas consents policy) and to prevent a sudden and sharp decline in the size of the coal industry. The scheme criteria were designed to ensure that subsidies paid satisfied the requirements of the Coal State Aid Code and the European Coal and Steel Communities (ECSC) Treaty under which UKCOAS operated. Extension of the UK Coal Operating Aid Scheme On 5 March 2002 the European Commission approved a targeted extension to the scheme to 31 December 2002. Under the terms of the State aid regime, the Scheme could not be extended beyond that date. The UK Coal Operating Aid Scheme (UKCOAS) closed to applications from 31 December 2002. For information about payments made under UKCOAS, please see the 'Awards Made' spreadsheet under 'Related Documents'. 2. Coal Investment Aid (CIA) In June 2003, the European Commission approved the offer of Coal Investment Aid under Council Regulation 1407/2002. Up to £60 million was made available to reimburse up to 30% of eligible investment in approved mining projects. All awards were mine-and project-specific and all claims must be made before 31 March 2008. The original intention was to invite applications for aid in three periods – 2003, 2004 and 2005, but £58.5 million of the planned total was awarded in the first two periods, so no third period was opened. Awards were made to 12 mines. Over £47 million has already been drawn down. For further information about Coal Investment Aid, please see the Coal Investment Aid page. [The above is from the DTI website]
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