Letter: Coal crisis: market fallacies, short-term subsidies, energy policy

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The Independent Online
Sir: Your report ('Thousands more coal jobs 'at risk' as market shrinks', 23 January) repeats three fallacies made by the Government's consultants that are likely to obfuscate public understanding of the issue.

First, the market for coal may shrink, but not to the point that domestic deep-mined coal has to be reduced. Last year coal usage in Britain plus exports was 105.5 million tons but colliery production was only 71 million tons; more than 40 million tons came from other sources, mostly domestic opencast and imports. The market for coal can lose up to 20 million tons a year to gas and at 85/90 million tons still take 65/70 million deep-mined tons, by cutting opencast and imports by up to 20 million tons.

Second, the 'viability' of British collieries is questioned and Michael Heseltine's supporters constantly refer to uneconomic collieries. Costs per ton of deep- mined coal vary within pits and cover a wide range between pits, but probably not more than 10 per cent of world output is mined more cheaply than the lowest cost British coal, and about 50 per cent of world output costs as much or more than the average British cost.

Third, you report the market estimates by the consultants Caminus as supporting Mr Heseltine and being based on estimated prices for imported coal. You then quote Gerard McCloskey, who runs a coal information service, as saying they . . . 'are much too low . . . either incompetent or deliberately misleading'. What you do not explain is that Mr McCloskey is the authority in Britain on international coal trade prices. The Department of Trade and Industry, the British Coal Corporation, Caminus, the generators, the power companies all get their information from Mr McCloskey. If he says Caminus and Mr Heseltine are wrong, they are wrong.

World recession and the Eastern bloc's desperate need for hard currency have put on the market small tonnages of cheap coal. It is ludicrous to take this as an indicator of world production costs, and assume that limitless tonnages will be available at this price now and forever. There is no problem with coal that will not be solved by slapping pounds 10 a ton on dumped coal, and phasing down opencast production.

Yours sincerely,


Bepton, West Sussex

23 January