The Business Case Against West Cumbria Mining/Woodhouse Colliery

  1. See a joint submission of objection by Ciara Shannon, EdenWorks and Duncan Pollard & Associates for application 4/17/9007. The Business Case Against West Cumbria Mining (WCM). For consideration for the October 2, Cumbria Council meeting. (Sent Sept 29)
  2. See our joint request to the Secretary of State that he “calls-in” 4/17/9007. (Sent Oct 16).

For further information, please contact both: &

Woodhouse Colliery will produce metallurgical coal for steel making for the UK and EU. Photo credit

(See below a few summary points for now).

As our objection states, we do not think that WCM’s business plan is economically viable. This is especially the case given the profit levels over 10 years of £302 million, as quoted by WCM. Recent information submitted by WCM also states it would contribute £300 million in taxes in the first ten years. This is a reduction from £500 million that was proposed previously.

WCM has (or expects to) receive £14.7 million in private equity financing from EMR Capital Resources Fund 1 and they state the mine will add £1.6 billion to the UK’s GDP in its first 10 years of operation, accounting for £2 billion worth of exports and they’ll pay £300 million in taxes.

Our estimate is that taxes are only likely to be £105 million in the first 10 years. This is before consideration of carbon taxes. We also estimate that WCM median salary will be £34,000 – this is lower than the median for Copeland of £35,672 (£37,856 male, £30,784 female) and their taxes are only likely to be £105 million in the first 10 years. Again, before consideration of carbon taxes.

We are also concerned that the mine could soon become a stranded asset as globally there is already 30% oversupply of steel in markets and there are concerns about the future of the industry. In 2019, the UK imported 2.177m tons of coking coal, predominantly from the US and Russia. It is used in steelmaking, and, to a lesser extent, in concrete manufacture and heating.

Globally, the Covid-19 crisis has deepened the state of the steel market and new orders have been cut by up to 70% or so. This has led to a devastating impact on workers, with many facing temporary lay-offs, reduced hours, and an uncertain future.

Add to this, carbon regulations are tightening up in line with the Paris Agreement and the steel industry is being pushed by investors to use clean energy technologies that don’t need coal, to remain competitive.

Just yesterday, ArcelorMittal’s (the world’s largest steel company) announced its Net Zero target and this came after after extensive engagement via Climate Action 100+ (climate investor initiative) who are using their financial clout (of USD $47 trillion in assets under management) to demand net zero targets. In this case, engagement was led by Aegon Management and the London Pensions Fund Authority.

If steel companies and metallurgical coal companies don’t start to decarbonise fast, this could result in significant asset write-down and stranded assets. Strategies to survive will be focused on slashing costs to try and cover liabilities and the carbon price and this will impact salaries and job security, which in turn will reduce profits, impact business rates and tax revenue. It is essential that jobs created by WCM do not end up being subsidised by the UK taxpayer and the social and economic impacts of this risky business are thought about now.

In our submission, we outlined the importance of a clear long-term climate strategy that will help Copeland Council make the right carbon-neutral employment and investment decisions. Equally important, is a just transition strategy that seeks to secure and protect the future and livelihoods of workers and communities in the transition to a low-carbon economy.

We also think there will be serious reputational risks to Cumbria Council, Copeland Council and to the UK Government as UK hosts for COP26 in 2021. The investment by WCM in new coal production will put unprecedented attention both locally and nationally onto WCM, Cumbria and the Government in Westminster.