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AN OVERVIEW OF THE COAL INDUSTRY IN THE UK

Employment

The UK coal industry currently employs 9,300 people, with approximately 6,600 people employed in deep mines and the remainder in the opencast sector. The majority of jobs are in England (over 7,000 employees); Scotland has over 1,200 and Wales about 970.

Output

In 2004, total UK production was 25.1 million tonnes, with 12.5 million tonnes from deep-mined production and opencast accounting for 12 million tonnes. Deep-mined output was 20% lower than in 2003,and down a further 5% on 2002 figures. This is mainly due to the closure of mines such as Longannet, Prince of Wales, Betws, Clipstone & Selby complex. Opencast output was down 1% in 2004, and has been declining gradually from a peak of around 16.7 million tonnes in 1997.

Trade

Very little UK coal (steam or anthracite) is exported, usually much less than 1 million tonnes per year. Imports in 2004 rose to 36.2 million tonnes despite higher international prices. The increased level of imports is due to lower than expected production levels at some UK mines. Major sources of imports include Australia, Colombia, Poland, South Africa and USA.

Demand

Overall coal consumption in 2004 was down 3% at 60.6 million tonnes. Coal burn in major electricity generators, who accounted for over three quarters of total coal use, was lower by 5% in 2004. Some 33% of electricity generated in 2004 came from coal. Demand for coal has fallen as gas has become more competitively priced.

Opencast / Deep mines

As at 31 March 2005 there are 42 opencast sites and 8 major deep mines in production.

Coal prices

Prices for internationally traded steam coal imported into North West Europe was around �/tonne in 2002, but have risen strongly since then and reached an average of �/tonne in 2004. Between 2003 and 2004, international imported steam coal prices increased by 49 per cent on � sterling basis. Prices received by UK producers for sales to generators have been in the range �/tonne to �/tonne over the period 2002-04.

 
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