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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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An Eulogy for the Industrial Revolution's Power Source

The capitalist world has little time for nostalgia, as its primary mission is making money, but a recent pronouncement out of Britain is sounding the incipient death knell for a power source that fuelled Britain’s Industrial Revolution, and, by extension, the modern capitalist world.

INING group UK Coal is currently in discussions to shutter Britain’s biggest remaining coal mining pit.

Nothing personal - INING group UK Coal wants to restructure its business.

The potential cost, for those on the coal face is hundreds of jobs.

The balance sheets rule and the firm is considering closing its Daw Mill near Coventry by early 2014 when current coal panels will have been exhausted. The firm has stopped work to extend production there beyond then.

Who cares?

Well, UK Coal is a major supplier to Britain’s coal-fired power stations from three deep mines and six surface mines but nonetheless issued a press release noting that while the Daw Mill had considerable long-term resources, production is 175,000 tons behind budget. Hence the projected closure.

Finances?

UK Coal stated that it wants to ensure that financial uncertainty at the mine does not affect the rest of its business, which includes deep mines at Thoresby and Kellingley in North Yorkshire. UK Coal returned to profit in 2012 for the first time in since 2009 and UK Coal Chairman Jonson Cox said it was also negotiating with its main banker, Lloyds, and was confident it would secure new funding because of its restructuring plans, as last year its fortunes shifted from an interim loss of $146.4 million to a profit of $34.7 1 million in six months, with revenues surging more than 80 percent as coal's average prices rose by 20 percent..

In 1994 UK Coal, bought British Coal's core mining assets after the privatization of the state miner.

UK Coal, whose coal output generates 5 percent of Britain's electricity, said the situation at Daw Mill had reached “crunch point” and its continued operation was no longer sustainable as miners are currently drilling through a geological fault, reducing output.

But hidden in the UK Coal pronouncements is the prolonged and slow motion war waged by the government against the miners, which culminated in the increasingly personal battle between Conservative Prime Minister Margaret Thatcher and her nemesis, National Union of Miners President Arthur Scargill.

In the May 1979 British General Election Thatcher became Prime Minister with a 30-seat majority in the House of Commons. Her economic policies, combined with the recession of the early 1980s, saw union membership plummet from 12 million in the late 1970s to almost half that by the late 1980s. Remembering that the previous Tory government of Prime Minister Ted Heath had been brought down by a miners' strike, Thatcher took on Miners Union President Arthur Scargill in late 1984 after she trounced Argentina in its Falklands dispute. She noted, "We had to fight the enemy without in the Falklands. We always have to be aware of the enemy within, which is much more difficult to fight and more dangerous to liberty."

Simply put, the NUM crumbled and the miners lost, returning to work humiliated in 1985.

And for the last two decades Britain’s miners, once the heart and soul of for more than a century of progressive labor policies in the United Kingdom, have essentially been forced to deal with whatever dictates Westminster has issued. After all, Britain has many options for buying coal elsewhere, ranging from the Russian Federation to former colony Australia.

But, not to worry. On its website UK Coal under the subheading “Renewable Energy” notes, "UK COAL has established its own power generation business, which utilizes waste gas from mines to generate electricity, and to pursue the development of wind power generation through a strategic collaboration agreement with Peel Energy. Over time, it is hoped that this collaboration will promote and maximize opportunities from this part of the business."

But for those observing the situation with a modicum of historical awareness, spare a thought for the two centuries of British ministers that went underground to work the ‘black seam” and power the world’s first industrial revolution.

Now, to quote Michael Corleone, “It’s just business,” and Britain’s business interests now extend far beyond its Midlands historical “black country” mining belt, home to the country's prosperity.

By. John C.K Daly of Oilprice.com




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