Malcolm Prowle argues that open-cast mining should not have a major role in the future of our economy

October 31st, 2012

Open-cast mining has always been a part of the UK coal mining industry but with the virtual dis-appearance of deep mining it has come to hold a dominant position. In Wales as in other parts of the UK, there has been something of an upsurge of open-cast mining in recent years. Currently there are three active sites, at Fros y Fran, Nant y Mynydd and Tower, with several other possible sites at various stages of approval.

Some see this situation, somewhat mistakenly, as a rebirth of the Welsh coal industry which so dominated economics and politics in Wales for more than a century. We have a long and proud history of coal mining and it is tempting to see these jobs as a return of the coal miner. In reality, however, jobs at an open-cast site are more akin to construction than mining. Developments such as this are not going to lead to the resurrection of the Coal Board in Wales or the rebirth of the National Union of Mineworkers.

Proposals to establish a new open-cast mining site are usually highly controversial with strong opposition from residents in the area close to the mine. On the other hand, proponents of open-cast mining make huge claims for the benefits of such developments. So where does the truth lie. What is needed is here is rationale analysis.  I want to address four main themes.

  • Benefits of open-cast developments
  • Impacts of open-cast developments
  • Contribution to Welsh economic strategic goals
  • Legacy issues

Benefits of open-cast developments

The key benefit of open-cast developments is largely to do with new jobs in the area. Typically a new mining development will result in 200+ new jobs in areas where there are often high levels of unemployment and so they are rightly seen as being of great benefit to the area. In addition, of course, the creation of such new jobs will have a multiplier effect in the area since these many of these new employees will spend money in shops, restaurants etc in the area thus creating yet more jobs. However, the magnitude of this multiplier effect will vary from case to case according to a range of factors.

A number of comments need to be made about the jobs created by open cast mining sites:

  • The numbers are often exaggerated by developers in their planning application and there is no mechanism for enforcement at a later stage.
  • A proportion of the jobs will be temporary concerned with site construction.
  • The bulk of the jobs will be for men.
  • A substantial proportion of jobs will be filled by transfers from elsewhere in the company, or from other areas, and may not constitute new jobs in the site area.

Finally, concern must be expressed about the viability of the open-cast developments. Usually such projects aim to extract coal over a period of 15-20 years, but this depends on the commercial viability of the operation. Looking at the current and projected state of the energy market, and the environmental pressures on the use of coal, there are concerns that coal can sustain its current price over the long term. A significant drop in the price of coal would mean that such open-cast operations could become unsustainable and may have to be curtailed early with the subsequent loss of jobs. Indeed, this may be already happening with employees at Aberpergwm being warned that jobs may be lost because of the market position of coal.

Impacts of open-cast developments

Many of the actual and proposed open-cast sites in Wales now lie in quite picturesque surroundings where the landscape has been recovered after coal tipping took place in the heyday of mining. The reality is that, whatever degree of care is taken by the mining companies the site of the open-cast operation will cause large scale and long term visible damage to the environment. This has a number of implications including noise, dust and a poor visible outlook.

In some cases, the impact of the new opencast operation can be a loss of existing jobs. This would be the case if the open-cast mine was in proximity to existing factories and the dust produced posed a risk (or is perceived to pose a risk) to their operations. This would be the case in companies in fields such as the biosciences, precision engineering, and medical devices. In such cases there is a very good chance that those companies would be forced to relocate or go out of business. Furthermore, in some cases the open-cast development may also cause those companies to defer any planned expansion in the existing location. The impact of these events could be a loss of local jobs many times the numbers of new jobs created by the open-cast.

Another economic issue is inward investment. Historically, Wales has had a good record of attracting inward investment largely through the effectiveness of the former Welsh Development Agency. However, a recent report by the Commons Welsh Affairs Committee argued that the abolition of the WDA has reduced Wales’s visibility in the global market place. The chair of the Committee stated that, “Wales is now one of the worst performing areas in the UK in terms of attracting inward investment”. If these are the difficulties faced by Wales as a whole then the difficulties of attracting inward investment in deprived south Wales valleys and towns, where many open-cast sites are located, are even greater. We know from experiences of Valleys-based companies such as Rechem in Ponytypool and the Phurnacite Plant in Aberdare that such unpleasant manufacturing operations are a strong deterrent to inward investment. Open-cast mining can be added to that list.

Some open-cast operations transport the mined coal via railheads located close to the site. Others have to rely of fleets of heavy lorries transporting the coal by road. Aside from noise and vehicle pollution these lorries will cause largescale road damage the costs of which will have to be borne by the local council and not the mining company – a classic economic externality.

Finally there are the impacts on the local population of the area who have to live with the dust and the noise with the consequent impacts on physical and mental health, and general well-being. These impacts will fall on individuals in their homes but also on other organisations such as schools, colleges and hospitals.

Contribution to Welsh economic strategic goals

The expansion of open-cast mining operations needs to be considered in the context of the Welsh economic strategy. It is to be hoped that any such developments would support and not inhibit achievement of that strategy.

In 2011, the Welsh Government published The Implementation Plan for Economic Renewal: a new direction which outlined five main priorities, two of which were:

  • Making Wales a more attractive place to do business
  • Targeting business support in certain key sectors

The business support referred to was to be targeted on the following sectors where, it was felt, Wales could gain competitive advantage and benefit from growing markets:

  • ICT
  • Energy and environment
  • Advanced materials and manufacturing
  • Creative industries
  • Life sciences
  • Financial and professional services

Expansion of open-cast mining hardly aligns with any of these priorities. In the first place the damage to the physical environment is unlikely to encourage companies to invest (as has already been referred to) or for their managers and workers to wish to reside in the area. Indeed, at least three of the sectors are likely to be significantly negatively affected by the dust in which they would have to operate. And, in relation to the energy and environment sector the Welsh Government’s policy statement gives little emphasis to coal and rather more to producing low carbon energy in an environmentally friendly manner.

It is difficult to see, therefore, how open-cast development can be seen as ‘fitting in’ with Welsh economic strategy. Furthermore, the essence of an economic strategy is to chart a path for the longer term and it would be folly to undertake something contrary to that strategy for very uncertain and short-term economic gains.

Legacy issues

It is a well-known fact that deep coal mining left large scars on the physical environment of the south Wales towns and valleys which took many decades to remove. Although open-cast mining will undoubtedly damage the physical environment of Wales once more it is to be hoped that this will be a temporary phenomenon. Planning approval given to mining companies will undoubtedly contain measures designed to force the companies to restore the landscape to its former state at the end of the period of mining.

However, there is a legacy which is less obvious to the eye but is just as problematic, indeed even more so. This is the erosion of the social and economic well-being of the population of the areas where open-cast is developed. Open cast will have negative impacts on the health, (physical and mental) status, poverty levels and general well-being of the population. In particular there will be an impact on children and could easily lead to a ‘lost generation’ as has happened in other parts of the country. At a time when concerns abound about inter-generational equity, this is a key point to bear in mind. Also the costs to Government of dealing with the social problems created will vastly outweigh any benefits produced.

The conclusion must be that any such open-cast development should be subject to an independent cost-benefit analysis.. A cursory analysis suggests that open-cast has no major role to play in the Welsh economy of the 21st Century. Nonetheless we must always be aware of politicians taking short-term decisions to gain popularity in time for the next election.

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Professor Malcolm Prowle is a professor at Nottingham Business School and visiting professor at the Open University Business School. For twenty years he worked for two large international consulting firms where he led a number of evaluations of large scale projects. He has published many books and papers on the issue and has been an adviser to a House of Commons Select Committee. He was born in and resides in the South Wales valleys.

4 Responses to:“Questioning the rebirth of Welsh coal”

  1. Gordon James says:

    Anybody harbouring thoughts of “the rebirth of Welsh coal” should heed the words of the “grandfather of climate science”, James Hansen. He has said of coal:

    “Coal is the single greatest threat to civilisation and all life on our planet.

    “The climate is nearing tipping points. Changes are beginning to appear and there is a potential for explosive changes, effects that would be irreversible, if we do not rapidly slow fossil-fuel emissions over the next few decades. Our planet is in peril. If we do not change course, we’ll hand our children a situation that is out of their control. One ecological collapse will lead to another, in amplifying feedbacks.

    “Coal is not only the largest fossil fuel reservoir of carbon dioxide, it is the dirtiest fuel. Coal is polluting the world’s oceans and streams with mercury, arsenic and other dangerous chemicals.

    “Coal-fired power plants are factories of death.”

    http://www.guardian.co.uk/commentisfree/2009/feb/15/james-hansen-power-plants-coal

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  2. david thomas williams says:

    The impact of open cast mining on the people of Rhymney will tell its own story if planning for open cast mining is allowed seems to have no affect on open cast mining companies or their management. Health-wise people in the area have been treated very badly by central government for decades with no work, no sustainable work, no means of getting well fed and children are not even considered as in need of healthy living since the closure of deep mines by a previous tory government which suggests that people in Wales especially in the valleys, to be of a race of people to be used and abused in any way to profit coal mining companies with easily accessible means to destroy not only the mountain but the people in and around the area of concentration of coaling impact, a double dose of injurious coal disease impact on the lungs of young children. Deep mining had its affect on the worker, modern open cast mining will have its effect on whole communities and the weakest such as children would suffer most, as an ex-miner it would be right and proper to oppose open cast mining at any cost.

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  3. Steve Leary says:

    THE FUTURE USE OF COAL FOR POWER GENERATION PURPOSES IN THE UK

    At the start of this contribution I have to declare an interest. As Co-ordinator of the Loose Anti Opencast Network (LAON) I am generally against opencast coal operations. However, in gathering new evidence to support those objecting to current and future opencast mine applications, LAON has some new facts to contribute to this debate.

    In September 2012, the Department of Energy and Climate Change announced a consultation exercise, “Biomass, Electricity and Combined Heat and Power Plants’ which contained this statement on the future use of coal for power generation purposes

    “….confirmed our primary focus for biomass electricity in the shorter term towards removing coal from the current UK power generation mix”

    See ‘Biomass, Electricity and Combined Heat and Power Plants’ (Consultation Document), Department of Energy and Climate Change, September, 2012, p 15, Para 1.7 @

    http://www.decc.gov.uk/assets/decc/11/consultation/ro-banding/6339-consultation-on-biomass-electricity–combined-hea.pdf

    The Loose Anti Opencast Network obtained an estimate on the future use of coal for power generation purposes in the UK from the DECC in October 2012 which confirms the phasing out of coal for power generation purposes as follows:

    Year Tonnage ™ Year Tonnage ™
    2011 40.57 2021 9.63
    2012 57.81 2022 9.24
    2013 54.17 2023 8.15
    2014 45.95 2024 7.35
    2015 42.50 2025 5.36
    2016 28.41 2026 4.06
    2017 26.62 2027 2.36
    2018 21.82 2028 1.65
    2019 18.96 2029 1.38
    2020 13.32 2030 1.36
    Figures compiled by David Wilson at the DECC, October 2012

    See http://www.indymedia.org.uk/en/2012/11/502131.html

    This decline is partly due to 6 power stations, Ironbridge, Didcot, Cockenzie, Ferrybridge, Kingsnoth and Tilbury closing by 2015 because they fail to meet contemporary pollution control standards.

    Two of these stations will or have already reopened after being converted to burning biomass, Tilbury and Ironbridge.

    Two more coal firing power stations, Drax (part) and Eggborough, are to convert to burning biomass.

    More are expected to follow, partly because of the changes in the subsidy system and partly because Generating Companies have until the end of next year to decide on whether they are going to invest in adapting their coal burning power stations to conform to the new EU Integrated Pollution Control Standard, or work them for 20,000 hrs between now and 2023 when the new pollution standards become mandatory. In addition, from January 2013 the ‘Carbon Tax’ becomes payable – a tax designed to make the use of coal less economical.

    So, I would suggest as this debate develops, that this trend to replace coal with biomass power generation should be born in mind.

    Steve Leary, Co-ordinator, The Loose Anti Opencast Network

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  4. More on the Future Demand for Coal :The Energy Bill says:

    The Loose Anti Opencast Network is broadly in favour of the intention of the Energy Bill to reduce the reliance on coal in the UK‘s Energy Mix, as this will reduce the need for new surface mine sites in the UK. However it leaves local communities across the UK living on or near to shallow coalfields uncertain about how soon these reforms will result in reducing the risk of opencast mining in their area.

    Despite the proposed legislation reducing the demand for coal, developers are proposing to operate at least 23 new surface mines across Britain over the next few years. Some of these proposals are for large, new opencast mines that will have a life span of 12 to 15 years – well into an era when the demand for coal will have fallen by 90 to 95%. Cauldhall, a new proposal announced by Scottish Coal near Rosewell in Midlothian in Scotland, is for a 10m tonne site covering 495 hectares, to be worked over a twelve and a half year period. Wales too has its monster-mine proposal for the Nant Llesg site near Rhymney in Gwent. Here Miller Argent plans to remove up to 9m tonnes of coal from a 1,200 hectare site over a 15 year period. These are the two largest opencast mine proposals at present, LAON know of 13 other proposals for England, 2 in Scotland and 5 in Wales [1].

    A recent press release from Business Green suggests that the provisions in the new Energy Bill announced on the 29th November, which will restrict all new generating plants using fossil fuels to a maximum CO2 cap of 450gms per kilowatt hour (KWH) is the ‘death knell for King Coal’. [2] In addition to this, existing coal plants will have to conform to lower emission standards under the new European Integrated Pollution Control Directive for nitrous oxide, sulphur dioxide and dust, which will mean having to make a decision, by the end of next year, to fit expensive new equipment, convert to biomass or be decommissioned by 2023.[3] To nudge the owners of power stations to make the right decision, the Government is introducing its Carbon Tax next year and a new subsidy system which rewards decisions to fully convert existing power stations to biomass rather than encourage ‘new build’ biomass power stations.[4]

    A recent calculation undertaken by the Department of Energy and Climate Change indicates that these changes will reduce demand for coal to insignificant levels, from the present 40.51mt in 2011, to 28.41mt in 2016 (a fall of 30%), to 9.68mt in 2021 (a fall of 77%) to 4.06mt in 2026 (a fall of 90%) and 1.96mt in 2030 (a fall of 95% on the 2011 figure).[5]

    If permission was granted in 2014 for the Nant Llesg site, by the time the last tonne of coal was dug out, national demand would just be about 1.38mt tonnes in 2029 and for Caudhall a little higher at 4.06mt tonnes in 2026.

    If the demand for coal falls to these levels, will it have been appropriate to have given permission, back in 2014 to have exploited these surface mine sites, especially if, all or part of the site, is a green field site?

    LAON hope that the future Parliamentary Debates on this Bill will include discussions about the impact this Bill will have on the coal industry, especially the surface mine coal industry and the demand for coal.

    In our view, there must come a time when it is no longer thought necessary to allow green field land, in any part of the UK, to be sacrificed on the altar of ‘the national need for coal’ if the country loses its capacity to burn coal.

    Communities across Britain, who live on or near the UK’s shallow coalfields in England, Scotland and Wales, will benefit from finding out when coal will lose its priority status in the planning systems of England, Scotland and Wales. We hope that a policy statement confirming the rate at which the use of coal for power generation purposes declines, assuming that there is no viable Carbon Capture and Storage system, will be forthcoming as the Energy Bill makes its way through Parliament.

    REFERENCES
    1) LAON’s 7th Review of UK Opencast Sites for November, 1/12/12, LAON / Nottingham Indymedia @
    http://nottingham.indymedia.org/articles/3309

    2) ‘Energy Bill sounds death knell of king coal’ (Business Green, 30/11/12) @
    http://www.businessgreen.com/bg/news/2228513/energy-bill- sounds-death-knell-for-king-coal

    3) Europe coal spurt runs into pollution limits’ (Arab News, 15/10/12) @
    http://arabnews.com/eu-coal-spurt-runs-pollution-limits?

    4) “Biomass, Electricity and Combined Heat and Power Plants” (DECC, 7/9/12) @
    http://www.decc.gov.uk/assets/decc/11/consultation/ro- banding/6339-consultation-on-biomass-electricity–combined- hea.pdf

    5) ‘As the Need for Coal Declines it May be Made Easier to Dig the Coal Out’ (The Loose Anti Opencast Network, 2/11/12) @
    http://www.indymedia.org.uk/en/2012/11/502131.html

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