Supply and demand govern coal price
Sir, I read your July 2014 editorial "
The wages of cheap" with interest as someone who has worked for over thirty five years in the global mining industry I share your obvious anger if not your analysis.
Coal is currently cheap because we are producing more coal than the world currently consumes, we have record production from Australia and a rise in exports from the Indonesia and the USA and there is more tonnage in the pipeline. At the same time the market for coal, while still growing in Asia, is under pressure in Europe and North America due to alternatives such as shale gas and concerns about global warming. As a result the price of thermal coal has fallen around 45% since 2011, it is good old fashioned supply and demand at work and not some Machiavellian action by energy suppliers.
The reasons for coal mine deaths in Turkey, China, India and Russia have common themes, poor legislation, poor enforcement, poor management, vested interests and complex socio-economic factors. Most of these mines supply coal into their domestic markets (rather than export) often at a prices and quality lower than the global seaborne coal prices and quality. The bulk of the seaborne coal is produced at modern, efficient and safe mines which UK mines can't compete with for reasons well understood. Higher coal prices would not lead to a renaissance in the British coal industry nor would it stop the deaths in coal mines in China or Turkey as recent history has shown when coal prices were double what they are now. Change has to come from within problem countries themselves and needless to say there has to be the political will to do it.