The pits and the pendulum

The pits and the pendulum
GUY DIXON
(gdixon@scotlandonsunday.com)

FROM his constituency office in Dalkeith, David Hamilton gazes out over a town once known for coal mining but now seen by many as a place you pass through quickly en route to Edinburgh.

The Labour MP for Midlothian knows better than most of his colleagues at Westminster what impact the collapse of the miners' strike in 1985 had on the towns south of Edinburgh that were reliant on coal, such as Dalkeith, Newtongrange and Monktonhall.

Between 1965 and 1984, Hamilton was a miner, working in collieries in England and Scotland and being arrested when leading strikes against pits being closed as the industry faded.

Hamilton regrets the demise of the industry that once employed millions in Britain and helped unite communities such as Dalkeith, and he claims that it can come back from the dead.

"We have only extracted 15% to 20% of reserves in the UK," he says. "Many of our EU colleagues are envious of [our coal reserves]. I believe there's a future for coal. The public and private sector should sit down together and talk about investment. But it won't happen if Scotland has a different energy policy from the rest of the UK."

The latter comment is a criticism of the Scottish National Party's plans not to follow proposals being considered in Westminster to develop the next generation of nuclear power plants.

First Minister Alex Salmond said last week that he believed use of so-called "clean coal technology" could contribute to the country's energy needs and vowed to resurrect deep mining in Scotland.

The news followed the decision by Spanish group Iberdrola - which owns ScottishPower - to invest in new clean-coal technology at its two coal-fired stations at Longannet and at Cockenzie.

Deep-mined Scottish coal has a high sulphur content and strict European rules banned using high-sulphur coal in power stations but clean-coal technology - which extracts 90% of the sulphur - in theory makes it acceptable to the green brigade.

Salmond said: "If you can use clean-coal technology, coal has a dynamic future. It means coal, from being environmentally unacceptable, is becoming environmentally attractive."

The comments fired the starting gun on what could be a new era for coal mining in Britain. But as economists and politicians consider resurrecting the industry, others are wondering whether the numbers add up and whether extracting and burning coal on a major commercial scale in Britain is all just hot air.

Coal has been on the back foot in Britain since the defeat of the miners in 1985. Now an industry that once employed close to a million pays the wages of a few thousand and there are just eight deep mines left in Britain. There are none in Scotland.

But rising demand for energy - fuelled by booming Chinese and Indian economies - has seen a revival in the worldwide coal industry. Much of the world's cheap coal comes from huge opencast mines in South Africa and Australia, and Britain imports the bulk of the stuff it burns.

Northern England, Scotland and parts of Wales have extensive coal reserves, but deep mining is hugely expensive. Opencast mining is more cost-effective but unpopular as it destroys vast tracts of countryside.

Juliette Lowes, partner in energy and natural resources at KPMG, says British mines would be competing with those in South America, parts of the former USSR and South Africa, and points out that foreign companies often face less regulation, lower labour costs and smaller overheads.

But Lowes believes coal could be a useful "short-term" fix to Britain's looming energy crunch and could keep the country powered before the next generation of nuclear plants are up and running. She says: "If you believe the nuclear option ultimately will happen, this could be a five- to 10-year opportunity for coal. Let's investigate opportunities for coal in Scotland. But don't stride in thinking it's going to be easy."

She also pours cold water on suggestions that the industry could ever employ great numbers of people. Mining techniques have come a long way since the 1980s and the industry is today much less labour intensive. "If you look at the number of mines in the UK, it's handfuls, and in any one mine it would be hundreds of people, not thousands," she says.

But this has not stopped some Scottish companies from investing in coal. The Scottish Resources Group owns Scottish Coal and supplies more than four million tonnes a year in the UK.

Edinburgh property group Miller has recently won planning permission to develop an opencast mine in south Wales to supply the nearby Aberthaw power station.

Lowes says it is likely that if mining were to be resurrected in Britain, it would be overseas companies that would take a lead. "Large international companies would be better placed to offset some of the higher costs in the UK with their overseas operations," she says.

Stuart Haszeldine, professor of geology at Edinburgh University, says the numbers could stack up for deep mining - but only with a level playing field. A coal plant would cost £1bn to build and a gas-fired alternative just £400m, while a nuclear station would be the more expensive option at £1.5bn. But the nuclear industry is likely to receive preferential treatment from the government over coal for political and environmental reasons, not least to overcome planning objections, and that could deter investment in mining.

He says: "To do nuclear power, you have got to build six or eight stations to replace what's going offline. If you want to do that, you may have to give preferential treatment to developers. That means people doing coal would be more wary."

He believes an answer could come from new methods of extracting energy from coal, including combusting it underground and pumping it to the surface. But Haszeldine says these technologies are unproven.

David Hamilton insists that with a little imaginative thinking and public and private sector money, mining has a future in Britain at a time when security of supply is important in an uncertain world.

He says: "It's not just local jobs [that could be created] - it's about the long-term prosperity of this country. We are moving away from self-supply and we cannot depend on other countries.

"There needs to be a review of open cast policy and deep mining. You take coal from the surface and drive deep mines underground and one would pay for the other. It gives prosperity and employment."