Energy News Beat
ENB Pub Note: There are very few coal mines left in Japan, so the coal will probably come from Austraila via a purchasing mechanism through Japan.
Labour’s Net Zero ‘madness’ reached new heights with taxpayers forking out millions of pounds for foreign coal to keep Britain’s last virgin steel plant running.
It comes just months after Energy Secretary Ed Miliband declared he had banned new coal mines in Britain to ‘send a signal to the world’ on climate change.
For the last two days, ministers have been in crisis talks with the Chinese owners of the under-threat steelworks in Scunthorpe – and offered to buy coking coal shipped all the way from Japan.
Officials approved funding for the 55,000-ton coal consignment after being warned that supplies were on the verge of running out, with the facility unlikely to reopen if its two furnaces shut.
British Steel was bought by Jingye Group, a Chinese company in March 2020.
The exact cost of the coal – which yesterday arrived at the Humber port of Immingham at the end of a 6,000-mile journey on a diesel-powered ship – is not known.
But recent commodities prices showed coking coal was trading at £131 per metric tonne – meaning the shipment would be worth £7.2million.
Labour’s Net Zero ‘madness’ reached new heights last night with taxpayers forking out millions of pounds for foreign coal to keep Britain’s last virgin steel plant running. Pictured: Ed Miliband, Secretary of State for Energy Security and Net Zero attends a speech by Prime Minister Keir Starmer at Doncaster Sheffield Airport on April 9
It comes just months after Energy Secretary Ed Miliband declared he had banned new coal mines in Britain to ‘send a signal to the world’ on climate change
t is understood the Government is due to cover the cost of yesterday’s delivery. The shipment will allow the talks to prevent the collapse of loss-making British Steel to continue while keeping the fires burning.
Conservative MP Neil O’Brien said: ‘It is totally mad that just a few months ago Ed Miliband banned coal and coke production in the UK and boasted about sending a signal to the world, yet now the Government are going round the world with a begging bowl trying to get enough coal to keep the last blast furnaces going.
‘That is this Government in a nutshell. They are prepared to sacrifice British industry and jobs in the poorer places (of the UK) so they can strut on the world stage, but all we do is move the jobs and investment to other countries and then import from abroad.’
Jingye, which says it has spent £1.2billion propping up the business since buying it in 2020, was unwilling to fork out for the coal as negotiations continued for a Government bail-out.
Labour has offered £500million to help fund two new, greener, electric arc furnaces, which recycle scrap steel, to replace the current furnaces at Scunthorpe.
For the last two days, ministers have been in crisis talks with the Chinese owners of the under-threat steelworks in Scunthorpe (pictured) – and offered to buy coking coal shipped all the way from Japan.
But Jingye wants £1billion of public money for the project, which it says could cost £2billion in total. If the current furnaces shut down and cannot be restarted, it risks ending Britain’s ability to make its own steel.
The UK would be the only G7 economy left in that position.
The coking coal is used to make virgin steel, which is made from iron ore rather than from recycled steel.
Such is the Government’s drive towards Net Zero, it has banned new licences for North Sea gas and oil exploration and also refused to defend a planned new coal mine in Cumbria, approved under the Tories, when subject to a Supreme Court challenge by environmentalists.
The Whitehaven mine would have extracted coking coal from beneath the Irish Sea for 25 years to fuel steel production. Tory MP Graham Stuart, a former energy minister, said: ‘It seems to be absurdity on absurdity.
‘It’s a pretty abject failure of Government for them to have cancelled a mine which involved the latest technology and would have produced coal using the latest, greenest methods.
‘The Labour Government, under Ed Miliband’s green zealotry, decided they must stop it.
‘Now our blast furnaces require coking coal to be shipped all the way around the world. The taxpayer is paying for coal at great cost from a dirtier source.’
Reform UK MP Lee Anderson added: ‘It’s absolute madness. We have a mine in Cumbria ready to develop which could supply coking coal to make cement and steel in the UK and we are importing the stuff from halfway around the world and in the process making other countries richer.’
Mr Anderson added: ‘This useless Government will not be happy until they have destroyed everything that has taken hundreds of years to build up.’
Labour MP and deputy chairman of the public accounts committee, Clive Betts, defended the Government, saying that coal would have needed to be imported for the blast furnaces even if the Cumbrian mine was going ahead.
He said: ‘The coal mine was going to take years and years before it was in production.’
The UK lost its ability to produce coking coal when Kellingley Colliery, West Yorkshire, closed in 2015 and since then it has been imported from countries such as Australia, the US and Japan.
Negotiations are continuing between the Department for Business and Trade and British Steel.
Jingye is considering closing Scunthorpe, with the loss of 2,700 jobs, if it cannot agree a deal, while the Government is considering the renationalisation of British Steel.
The GMB – one of three unions representing steelworkers in the talks – called yesterday ‘a crunch day’ for securing Scunthorpe’s future. GMB organiser Colin Todd said: ‘If a deal can’t be done, GMB is calling for nationalisation to secure this vital industry.’
In a joint statement, the Department for Business and Trade and British Steel declined to comment on the coal shipment but said there was ‘continued co-operation in talks to find a way forward’, adding: ‘Work continues at pace to find a resolution.’
Yesterday Sir Keir Starmer said ‘all options are on the table’. Demand for steel was ‘likely to go up, not down, which is why it’s very important to do everything we can’., he added.
Mr Miliband’s spokesman last night declined to comment.
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