Generators flex their muscles over coal

RJB Mining’s decision to close the Asfordby pit in Leicestershire has thrust the future of the UK coal industry back into the public spotlight. The closure – on geological grounds – seems to have reawakened awareness in Government and the public that the industry is approaching a watershed at the end of next March, which […]

RJB Mining’s decision to close the Asfordby pit in Leicestershire has thrust the future of the UK coal industry back into the public spotlight.

The closure – on geological grounds – seems to have reawakened awareness in Government and the public that the industry is approaching a watershed at the end of next March, which will determine whether it has a viable long-term future or withers to extinction early in the next century.

‘This is purely a mining issue, but it has helped to focus people’s attention on the future of the coal industry,’ said a spokesman for RJB Mining.

The crunch will come next year when RJB’s Government-brokered five-year contracts with the big power generators, guaranteeing the sale of large volumes at premium rates to smooth privatisation, end.

The generators will certainly only commit to smaller tonnages at lower prices in future, as the market for coal-fired electricity shrinks under the onslaught from gas on cost and environmental grounds. The volume consumed by the power generation industry is expected to almost halve by 2001 from this year’s 52.8 million tonnes, and the generators are looking for a price of no more than £1.25/gigajoule against the £1.50 of present contracts.

‘It’s about tonnages as well,’ said a source at one of the large generators. ‘How much can you get into the market?’

Energy minister John Battle reiterated his commitment to secure a future for the coal, stressing the efforts the Government has made on clean coal power stations and to stop subsidised Continental imports.