RJB sees secure future for coal

With new contracts and proposals for a power station, one producer is upbeat

Britain’s largest coal producer expects to boost the industry’s prospects with big new long-term supply contracts and a viable proposal for a clean-coal technology power station by the end of the year.

RJB Mining believes the development will give the lie to claims last week that official estimates suggest the industry is facing a 33% drop in output next year and the loss of 5,000 jobs in 1998.

‘The only thing you can say about these figures is they’re bound to be wrong. They’re certainly not the UK coal producers’ analysis,’ said an RJB spokesman.

RJB has already announced a contract with Eastern Generation, for 4 million tonnes over five years. It expects to sign a similar contract with National Power within the next two weeks and one with PowerGen by the end of the year.

It has also nearly completed the feasibility study into a proposed 400MW integrated gasification combined cycle (IGCC) plant at Kellingley colliery in West Yorkshire ahead of schedule. This, it says, shows that with initial Government support, the concept can secure an economically viable future for coal.

‘We know there’s a scheme there that will work,’ said the RJB spokesman. He said the study had shown that the generation costs of such a plant could come in under the 3.5p/kWh initially envisaged and that the company would disclose more details to the Commons’ select committee inquiry on 3 December.

While the contracts RJB expects to conclude by the year end seem likely to account for only about half the annual 29 million tonnes that the three generators currently take, RJB disputes this means the industry will have to halve in size.

It points out that the contract will certainly not meet the generators’ requirements in full over the period – Eastern will consume 6.7 million tonnes in 1997 – and there will be further shorter-term business to compete for. RJB also expects to develop new markets for its produce.

The pessimistic forecast for next year came from the report the Department of Trade and Industry sent to the European Commission as part of Brussels’ annual consultation exercise on the European coal and steel industries.

The DTI maintained the numbers came from the producers themselves. ‘They provided us with the figures and we passed them on to the Commission,’ said a spokesman.