UK govt approves new coking coal mine despite environmental opposition

The UK government late Dec. 7 gave its go-ahead for the UK's first new coal mine for 30 years amid strong environmental opposition, which could yet derail the project with no start-up date announced.

West Cumbria Mining's Whitehouse Colliery project at Whitehaven in the UK's North West, with an expected 3.1 million mt capacity to produce coking coal for steelmaking, has been under development since 2014. It gained initial approval from the Secretary of State for Communities and Local Government in early 2021, since when it has been working on sustainability plans and licensing.

WCM said Dec. 8 it was "delighted" with the decision of the Secretary of State to formally approve the Woodhouse Colliery planning application.

"The project can now move forwards to deliver the world's first net zero mine supplying the critical steel industry with a high-quality metallurgical coal product," WCM said in a statement.

The new project is contiguous to the last deep Cumbrian coal mine, Haig Colliery, which closed in 1986. A century ago, the UK was a major coal producer but output declined as deindustrialization and globalization made it harder to achieve economies of scale. Premium Low Vol coking coal was assessed flat at $249.50/mt FOB Australia, and CFR China was assessed down $2/mt to $315/mt CFR China Dec. 8, according to the Platts assessment from S&P Global Commodity Insights.

The new mine -- located underground on a brownfield site -- is expected to produce an average of 2.5 million mt/year of coal and extract and process up to 3.1 million mt/year over a 40-year mine life, according to information previously issued by WCM. The coal is a high-quality high volatile, hard coking coal (HV HCC). It has less than 4% ash, less than 0.001% phosphorous and extremely high fluidity of 30,000 dppm, the miner said.

The product is to be processed at a new preparation plant, then transported via a buried conveyor 2.2 km (1.4 miles) to a train loading facility for rail transportation via an existing link to Redcar Bulk Terminal on the UK's east coast. This is a deepwater port that can accept Panamax vessels year-round for onward distribution, the company said. Investment in the mine project was initially put at around $224 million.

Political considerations

Despite plans for a low-carbon emissions mining operation, the project is surrounded by controversy. UK integrated steelmakers British Steel and Tata Steel, which currently import coal for their blast furnaces, indicated they would potentially use only a small fraction of the new mine's output.

"While we could technically use a small amount of coal from the proposed mine in West Cumbria, any potential supply would be a commercial decision," a British Steel spokesperson said Dec. 8. Chinese-owned British Steel sources its coal from global markets excluding Russia, the spokesperson said.

A spokesperson for Tata Steel said: "We continue to review the origins of all the raw materials used in our steelmaking process to ensure they are high quality, cost effective and ethically sourced. We're conscious of our role as one of the UK's biggest industrial CO2 emitters and have made significant progress to reduce our carbon footprint through innovative solutions and new technologies. Constructive conversations with the UK government about the wider decarbonisation of our manufacturing processes are ongoing."

The government has touted the WCM project as capable of saving transport emissions as it could replace imports of coal: however, steel industry sources heard by S&P Global Commodity Insights indicated much of the new mine's output would end up being exported, mainly to European mills.

The government's approval of a new coal mine has clear political overtones at a time when coal usage is to be phased down, according to an international agreement made at last year's COP 26 climate summit in Glasgow. A government representative told the BBC Dec. 8 the mine project will provide 500 direct jobs and 1,500 indirect jobs in a part of the country favored by the conservative government's "levelling up" program which aims to improve wealth distribution nationwide.

The coal mine will provide a "transitional, but not a long-term solution" for providing coking coal to domestic integrated steelmakers, which will still need coal for "a period of time" during their decarbonization pathways, the government representative told the BBC. Many blast-furnace-based steelmakers plan to transition in coming years from coal usage to alternative fossil-free fuels, including hydrogen.

Mainly because of its coal usage, steelmaking is considered a "hard-to-abate" industry, responsible for around 9% of total global emissions.

One argument used during the new project's planning phase was that it could help build a stronger local supply chain to the UK steel industry following the UK's exit from the European Union.