The Coal Industry

The coal industry

The coal industry Charles Kernot

WO O DH EA D PU B LISH I NG LI M ITE D Cambridge, England

Published by Woodhead Publishing Limited, Abington Hall, Abington, Cambridge CB1 6AH, England www.woodhead-publishing.com First published 2000 # Charles Kernot, 2000 The author has asserted his moral rights Conditions of sale All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without permission in writing from the publisher. While a great deal of care has been taken to provide accurate and current information, neither the author, nor the publisher, nor anyone else associated with this publication shall be liable for any loss, damage or liability directly or indirectly caused or alleged to be caused by this book. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. ISBN 1 85573 105 3 Typeset by BookEns Ltd, Royston, Herts. Printed by Astron On-Line, Cambridgeshire, England.

For Helen

Contents Preface About the author Index PART 1: DEVELOPMENT OF THE INTERNATIONAL INDUSTRY

1 1.1 1.2 1.3 1.4 1.5 1.6

Coal from the earliest times The early days How coal was mined Costs and capital Transport The social cost The start of unionism

2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9

International discoveries Introduction Australia Bulgaria China Hungary Indonesia Poland South Africa United States of America

PART 2: WHERE COAL COMES FROM

3 3.1 3.2 3.3 3.4 3.5 3.6 3.7

What is coal? A fossil fuel Coal classification Composition and impurities Energy content Proximate analysis Ultimate analysis Coking coal

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Contents

4 4.1 4.2 4.3 4.4 4.5 4.6

Exploration, mining and production Introduction Feasibility studies Mining Productivity Total mining costs Reclamation

5 5.1 5.2 5.3

Treatments and quality assurance End product requirements Sampling Processing techniques

6 6.1 6.2 6.3 6.4

From mine to market Transport logistics Export ports Shipping Import ports

PART 3: COAL USES

7 7.1 7.2 7.3 7.4 7.5 7.6 7.7

Coal, electricity and the environment Who uses coal? How a power plant works Coal and the environment Flue gas desulphurisation Clean coal technology Competition Renewable competition

8 8.1 8.2 8.3 8.4 8.5

Coking, industrial and domestic coal Coking coal Iron-making Other metallurgical coal uses Industrial and domestic uses Other industrial applications

PART 4: SUPPLY/DEMAND, TRADE AND PRICES

9 9.1 9.2

World supply Introduction World producers

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Contents

10 10.1 10.2 10.3 10.4 10.5 10.6

World demand Introduction Areas of consumption The three coal markets Future demand Steel industry outlook Regional demand trends

11 11.1 11.2 11.3 11.4

International trade A blessing or a curse? International suppliers International consumers The traders

12 12.1 12.2 12.3 12.4 12.5

Coal pricing and hedging Introduction Contracts and pricing International coal prices Hedging Outlook

Appendix: Coal and shipping terms Bibliography

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Preface The international coal industry is a leviathan hidden beneath the surface of economic growth and prosperity. Indeed, despite its importance, it is surprising how few people know anything about the size and global reach of the industry. Whilst almost 500 million tonnes of coal are shipped annually around the world at a traded value of around US$15 bn, the total amount of coal mined each year amounts to some 3.8 billion tonnes. Assuming that this material fetches an average price of US$30/t, the total value of coal produced annually must approach US$100 bn. This is much higher than the next most important mined commodity, aluminium, which, after the substantial cost of upgrading the bauxite ore to the metal, has an annual output value of some US$35 bn. As this work has evolved it has moved from being a general book about the international coal trade into a more specialised information manual. Indeed, it contains detailed data on many parts of the international coal industry that are not available in one single source elsewhere. As a consequence, it should be useful to many of the players in the industry ± from mining exploration companies looking for coal, through the mining, processing and transport of the commodity, and ending with the consumers ± be they power generators or steel producers. Part one puts the industry in perspective, from the first discoveries of coal mines and the early development of the industry to feed the industrial revolution ± first in the United Kingdom and then spreading through the British Empire to the rest of the world. Whilst other countries also had coal industries in the seventeenth and eighteenth centuries, the first real developments outside the United Kingdom really began in the nineteenth century ± particularly in the United States. More recent developments include the coal mines of Colombia, Indonesia and Venezuela and the development of the steam coal export markets of Australia and South Africa. Part two looks at coal in more detail: what the commodity is and where it comes from. This has important consequences for both where the coal can be used and how it can and should be mined. Indeed, the treatments to upgrade the fuel to a saleable commodity

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are still advancing, to the extent that fine material is now finding a wider market. In the future there may be developments that can aid the removal of sulphur or moisture from coal to improve its value, although the ash content of the material will still need to be placed in a secure disposal site. Part three looks at the areas where coal is used ± mainly in the power generation and steel industries. In the future the amount of coal consumed is still set to rise given the increasing demand for electricity as countries develop and their economies expand. Whilst greenhouse gas problems may lead to pressure to reduce coal burn, what is more likely to occur is an increasing efficiency of the conversion of coal energy into electricity. Moreover, the increasing concerns about nuclear energy indicate that it will account for a declining share of the global electricity supply mix and that coal, gas and renewable electricity will increase their relative market shares. Part four finally considers the state of the coal market and the international trade in the commodity. It looks at the growth in supply of coal from Australia and South Africa in the early 1970s and the more recent growth in output from Colombia, Indonesia and Venezuela. The growth in demand in the Asia-Pacific region and the changing structure of the European energy industry are also covered as these provide important indications about the future development of the industry. There is also some data on coal prices, although this is the one area of the industry that remains extremely complicated at the present time. In the future, however, the creation of coal futures contracts by the New York Mercantile Exchange (NYMEX) may well remove some of the difficulty of extracting comparable coal price information on a global scale. The overall structure of the global coal industry is in a marked state of flux. Many of the non-mining companies that entered the industry in an attempt to secure a supply of energy during the 1970s are now turning their backs as they chase for better returns elsewhere. Indeed, the recent returns from coal-mining have been abysmal as increased production in the late 1990s coincided with the Asian economic crisis and meant that too much coal was chasing too little demand with the result that prices cracked. Consequently, those who are now buying into the industry will do so at depressed prices. If they can consolidate and coordinate production across mines with different cost bases and extract

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economies of scale they should make healthy returns. The ready supply of coal has meant that the industry has been forced into a position of price-taker rather than price-maker ± a situation that the current consolidation is set to change. The implications for returns on capital and mining company profitability should therefore be substantial ± but only if the companies left in the industry are more careful about planning and opening new mines than they have been in the past. For coal consumers the recent era of cheap coal energy is slipping into the past ± after all, the rise in the price of oil in 1999 is set to be reflected in the price of coal during 2000. This should provide further incentives to encourage consumers to make their consumption of the fuel more efficient. Indeed, the rally in the price of oil in the 1970s was a de facto environmental tax that encouraged sharply reduced consumption of the fuel. The low efficiency of many coalfired electricity generating stations across the world almost requires a similar price explosion in order to wreak similar efficiency improvements. This, perhaps more than any Kyoto Protocol, is what the world needs in order to reduce greenhouse gas emissions. In my first book on the coal industry, in 1993, I suggested that countries and companies should look to carbon sinks in order to reduce their net level of carbon dioxide emissions. This idea has now started to gain credence ± especially as a consequence of the plans to introduce the international trading of emission permits. Data, however, remains sketchy and many countries are unwilling to commit to a tax that could reduce their economic competitiveness. This, certainly, was behind the strong lobbying against US acceptance of the principle of global warming by domestic energy consumers in the early 1990s. Nevertheless, whilst the purchase of existing forests may help their specific preservation, what may well be required is the extension and expansion of forested areas in order to increase carbon reabsorption. This would increase carbon capture rather than continue to allow the slow build-up of CO2 in the atmosphere through the protection of existing forested areas from destruction by slash and burn agriculture. Although coal consumers clearly have an important part to play in the creation of protected areas, mining companies also need to consider what role they need to play. After all, the rehabilitation of old mine sites, be they open pits or underground

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operations, could provide large land areas for reforestation that would clearly help to improve the global environment. This work could not have been completed without the help and assistance of my long-suffering wife, Helen, who has encouraged and helped me through the dark periods when it looked as if it would never be completed. I also need to express my sincere thanks to all of those across the coal industry who have helped and provided me with information ± even if it only accounts for a sentence in this text. After all, it is this information that helps to create a single picture of an industry that remains split into a disaggregated part of global energy supply. As I mention above, I believe that the international coal trade is set to change dramatically over the course of the next few years, and this will be of as much importance to producers as to consumers. I hope that this work will aid their understanding of the industry and will help them formulate strategies to take advantage of these changes when they occur. Charles Kernot

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About the author Charles Kernot, head of metals and mining research at BNP Paribas, was educated at Winchester College and the Royal School of Mines, Imperial College, where he obtained his honours degree in mining geology. Since joining the City in 1985, he has researched all areas of the metals and mining industry, and has specialised in the coal sector, writing a book on the privatisation of British coal in 1993. Prior to joining Paribas in 1995, he was head of international mining research at Credit Lyonnais Laing. He is also a Member of the Institution of Mining and Metallurgy and the Association of Mining Analysts.

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1 Coal from the earliest times 1.1

The early days

1.2

How coal was mined 1.2.1 Origins 1.2.2 Water removal 1.2.3 Gas detection 1.2.4 Mechanical mining

1.3

Costs and capital

1.4

Transport 1.4.1 Canals cut costs 1.4.2 The age of the train

1.5

The social cost

1.6

The start of unionism

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1.1 The early days The earliest reference to the use of coal in Europe was by Theophrastus, the successor of Aristotle as head of the academy in Greece. In his treatise `On Stones' he describes a substance that was dug up in Liguria, north-west Italy, and Elis, in Thrace, because it could `be set on fire and burnt like charcoal' and was `actually used by workers in metals'. Whilst this substance is now thought to have been lignite rather than coal, it represents the first direct reference to the use of a mineral for fuel ± although the rarity of references to the use of lignite, or coals from the earth, indicates that it was not widely used during the Greek ascendancy. In the United Kingdom coal has been used at least since Roman times and probably from long before. The earliest indications come from Hadrian's Wall, where Roman troops are thought to have burned coal in order to keep out the Scottish cold over the long winter nights; and from Bath where coal provided the sacred flame in the Temple of Minerva. The destruction of forests in China also led to the early use of coal in the Asian region. One of the first recorded operations was the Fushun mine in Manchuria, which provided coal for copper smelting between AD1200 and AD1300. Despite these early sources of demand, mining is unlikely to have been carried out on an organised basis until the eleventh or twelfth centuries, and the initial gathering of coal probably took place where seams were exposed at the surface. Indeed this surface expression was one of the beneficial factors behind the early economic growth of the United Kingdom and meant that the country became the world's first major coal producer. Specifically, the first concerted efforts to extract coal in the United Kingdom were along the north-east coast, where coal seams were exposed by the erosive effects of the North Sea. This brought the fuel to the attention of the local population, which burned cheap coal in preference to the more expensive wood. It is in the thirteenth century that coal gets its first specific mention in the United Kingdom. Surprisingly, perhaps, there is no direct reference in the Domesday Book and neither did any of the other chroniclers of the earlier centuries give coal any mention. Consequently, the first explicit reference to the fuel seems to have been by the Bishop of Durham, in 1200, when he attempted to promote the development of coal in the Tyne Valley.

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In 1257 Queen Eleanor was forced to flee London because of the `fumes of the sea coals' and both Seacoal and Old Seacoal Lanes are to be found by Ludgate Circus in the City of London as a continuing reference of how coal was originally taken to the capital. Indeed, by far the easiest method of transport from the coal-mining area on the north-east coast to London was by coaster. The roads were in a dire state and it was not until the middle of the eighteenth century that the canal building programme really got underway. Notwithstanding London's increasing demand, the difficulty and expense of transport meant that there was little movement of coal from its immediate source until the thirteenth century and even this was not significant. Indeed, the majority of coal produced until the start of the sixteenth century was used within a two mile radius of a mine, and was largely restricted to the poor who could not afford to buy wood. The preference for wood was largely related to the lack of chimneys in most houses, which often just had a single central fire. As coal fires are sooty and smelly the cleaner, and in some cases more aromatic, wood was burned in preference to coal despite commanding a higher price. The population of London increased four-fold between 1500 and 1600, which led to such a great increase in demand for food that the surrounding land was cleared of forests and converted for agricultural use. Therefore, as with China, London's demand for coal was because the forests had been denuded and there was little other locally produced fuel available at an acceptable price. As coal could be transported by sea it could be moved right into the centre of the City and, therefore, directly to its market. This meant that there was little need for expensive overland movement and the low incremental cost of shipping greater distances meant that coal could be brought from further afield. The use of coal in London is first documented on a consistent basis by Westminster School, which kept records of the prices it paid for coal between 1585 and 1830. These prices are detailed in Fig 1.1, which shows that there were often marked fluctuations in the price that the school had to pay for its fuel supplies. These prices were often linked to periods of rising or falling prices generally, and the rise in price during the high inflationary period of the Napoleonic Wars at the start of the nineteenth century is clearly shown. This price rise is related both to inflation and the lack of manpower with troops fighting

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1.1 Prices of coal at Westminster School 1585±1830 (source: Kernot, 1993).

on the continent but is also related to the danger of attack by French privateers which sought to prevent coal reaching London. It should further be considered that most of the other known European coal regions were still in politically unstable countries and principalities and that there was therefore little threat of import competition. Both Belgium and Germany had large coal reserves but these countries were not in a position to invest large amounts of capital in order to serve the British market. This was despite the ease of access down the Ruhr and across the Channel. Therefore, mainland Britain was left in relative peace and security and this helped to promote the investment of capital in increasingly large-scale operations. Indeed, by the start of the eighteenth century coal was being mined in all known coal-bearing areas of the United Kingdom, with the exception of the deep Kent coalfield where mining did not start until the early twentieth century. It is difficult to estimate the total amount of United Kingdom coal production until the middle of the nineteenth century as the first country-wide statistics were not collated until 1854. Nevertheless, the annual production of coal probably averaged some 210 000 tonnes (t) in the 1550s and slowly grew to around 2.25 Mt in 1660, 2.5 Mt in 1700 and around 6 Mt in 1770. The sixteenth century saw the start of the

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1.2 Coal production in the United Kingdom 1550±1998 (source: Author).

upturn in coal output together with the first real increase in transportation to areas other than London. The increase in demand and production is sometimes referred to as `the sixteenth century coal rush' (Fig. 1.2) although the increase in production during the nineteenth century was clearly much more significant.

1.2 How coal was mined 1.2.1

Dunite

The first descriptions of coal mines in the United Kingdom exist from the fourteenth century when mining appears to have become an entrepreneurial operation with the coal often worked for sale rather than for personal consumption. In 1316 there is a description of a mine at Cossall in Nottinghamshire being worked by 12 men. Their payment of 12 old pence (12d) a pickaxe (equivalent to about 4d/t) was probably around one-third of the selling price of the coal at the time. The sixteenth century is also important as it shows the beginnings of the division of labour as the first full-time, specialist miners are recorded. Before this mines were small-scale operations employing no more than twelve individuals who were from the locality. Even so these workers would not have been employed for the

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full year as the need for agricultural labour during harvests meant that they were often relieved of their duties to help elsewhere on their lord's estate. Indeed, the ownership of the early mines was restricted to the few landowners in the vicinity of the coast and, for many years, one of the largest was the Church. Only the dissolution of the monasteries in the 1530s brought these properties into wider ownership. This additionally occurred at the time that London was starting to suffer from a timber famine, thereby stimulating the search for alternative sources of energy. The mines from which the coal was extracted were nothing like the great enterprises that exist today. As mentioned above, they employed probably no more than a dozen people and they were either simple drift mines cut into a hill or cliff, or they were bell pits dug out from a single shaft sunk into the ground. These pits could only extract coal from a restricted area at the bottom of the shaft because of the danger of rockfalls and the lack of ventilation provided by only one entrance. Indeed, it was not until the Hartley Colliery disaster in 1862, when 204 men suffocated at the bottom of a shaft because they had no other means of escape, that it became mandatory for two shafts to be sunk in every coal mine. As far as mining techniques were concerned, the introduction of improved ventilation through the use of brattices (doors or screens) to guide fresh air through the mines started in the 1750s. The decade also saw the introduction of pit ponies for the first time and, in this context, it is strange to consider that they were still employed in a handful of collieries in the 1980s. Whilst these improvements cannot be considered revolutionary they certainly helped mines to increase output to match the increase in demand that was occasioned by the industrial revolution in other sectors of the economy.

1.2.2

Water removal

Access to capital was important as the industry developed and expanded because of the need to pay for the technological improvements that were being made and could increase the production of coal from a mine. In particular, the development of the steam pumping engine was important as it enabled mechanical rather than manual removal of water from most underground mines accessed by a shaft. In 1698 Thomas Savery devised a steam pumping engine for the

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removal of water from underground mines in Cornwall. Unfortunately, the pump was inefficient in its energy consumption and it was necessary for Thomas Newcomen to make energy saving innovations in 1708 before the pump became more commercially viable. Demand for the modified pumps then spread across the country and by the start of the industrial revolution in the mid-eighteenth century there were around 100 pumping engines in the Tyne and Wear district.

1.2.3

Gas detection

There was only one major advance in the production of coal during the industrial revolution ± and some said at the time that it should not have been considered as an advance at all. This was the invention of the Safety Lamp. The need for safe illumination underground was well recognised in the industry and the sinking of deeper mines in order to increase output necessitated the development of a new method. This was because the deeper a mine, the poorer and more restricted its ventilation. In 1812 an explosion in the Brandling Main (or Felling) Colliery, near Durham, led to the formation of the Sunderland Society for the Prevention of Accidents in Coalmines. In 1815 the society appealed to Sir Humphry Davy to investigate methods of improving the safety of illuminating the mines, and this led to his development of the Safety Lamp. While Sir Humphry Davy later won most of the credit for the invention, his was only one of three lamps developed between 1813 and 1815, and it seems to have worked by default as he did not understand the real reasons for the success of the lamp. The other lamps were produced by Dr Clanny and George Stephenson and worked on a similar principle, restricting the amount and temperature of the air passing over the flame and thereby reducing the risk of an explosion that would have resulted from higher temperature combustion. The problem the miners faced as a result of these advances was that they were then able to extract coal from areas with poorer ventilation. This increased the potential problems of asphyxiation as a result of excess amounts of carbon dioxide (blackdamp or chokedamp) and the poisonous carbon monoxide (afterdamp) rather than the explosive methane (firedamp). This situation led to a comment by John Buddle to the 1829 House of Lords Committee into the mines

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that `we are working mines from having the advantage of the safety lamp, that we could not have possibly worked without it'. Although it was not recognised at the time, poor ventilation would have enhanced the likelihood of the miners contracting pneumoconiosis and other respiratory disorders.

1.2.4

Mechanical mining

If mechanisation is used as a strict definition of industrialisation then the industrial revolution of the British coal-mining industry did not start in earnest until the beginning of the twentieth century. The first real industrial advance was the introduction of mechanical cutting tools in the late nineteenth century but by 1900 they only accounted for 1% of the total of 228.4 Mt of coal mined in the country. The further developments of power loading and mechanical conveying were not introduced until the 1920s and 1940s, respectively, leaving the British coal-mining industry at the bottom of the world productivity table. This is not to say that there were no important innovations in the industry except for the development of the Safety Lamp. Indeed, in 1777, long before it was used above ground, the cast iron rail was being employed by Joseph Curr to aid underground transport. A wheeled corf, or wagon, was also invented by him to run on the rails and had the advantage of being able to be hauled straight up the shaft with no need to move the coal from one container to another, again reducing costs. These corfs were also hauled along the tracks using pit ponies rather than the women and boys who had previously been employed for the task. This meant that the miners could keep more of their money without the need to pay others to haul their coal out of the mine. However, it also meant that there was a large number of unemployed women and girls in the mining towns and villages and this labour attracted the textile millers who were setting up at the time. The delay in the implementation and introduction of new techniques and equipment was one of the reasons behind Britain's poor performance in the years between the two world wars. Whilst the productivity of a mine, of necessity, declines with age, a move to mechanical cutting and power loading can increase the output per man-shift considerably. However, one of the difficulties of moving to

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the new techniques was that many of the mines had already been constructed before the advances were made. As a result, the cost of altering the existing mine infrastructure was too great to overcome, especially because the availability of relatively cheap labour meant that the extra expense did not need to be justified.

1.3 Costs and capital As the early operations were small-scale affairs they had little need for capital beyond the work that was put into them by the miners. In 1350 a mine at Coundon near Bishop Auckland in Durham cost 5 shillings (s) and 6d to set up, including the cost of ropes, scopes and windlass. Prior to the development of efficient pumps the mines would not have been very deep so it did not take long until a new mine began producing coal and paying its way. Hence what might appear to be a relatively low cost of capital. There are other examples of the industry from the period which include lease payments for the land from which the coal was produced. Lease payments were a significant part of the total cost of coal and by the seventeenth century they had been transferred into royalties specifying a payment based on the production from the mine. This was deemed necessary because the landowners started to realise that the coal was a wasting asset and that they should seek some return from this asset rather than the use of the land from which it was produced. When a landowner wanted to let out the production of a particular area the miners could be charged both rents and royalties. The leases that were offered were normally for a period of 21 years at most and were sometimes only for a shorter period. This meant that the first mines were only relatively short-life operations and that large amounts of capital could not be recouped unless the owner had the freehold rights to the property and could be guaranteed long-term tenure. These royalties were initially very high in comparison with the royalty fees that are payable today, although this was partially due to the high rates of inflation during the period 1540 to 1620. By the late seventeenth century royalty rates averaged 5d/t, although some were as high as 1s/t, around a quarter of the pit-head selling price. In his

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Inquiry into the Nature and Causes of the Wealth of Nations Adam Smith mentions that `in coal mines a fifth of the gross produce is a very great rent; . . . and it is seldom a rent certain, but depends upon the occasional variations in the produce'. One reason for these high rents, or royalties, was because of the one-third rents that were paid on agricultural produce at the time. The mention that the one-fifth payment is `a very great rent' is to emphasise that it is still less than agricultural rents despite the much lower security offered by mining operations. Smith expanded this by stating that the variations in production `are so great that, in a country where thirty years' purchase is considered as a moderate price for the property of a landed estate, ten years' purchase is regarded as a good price for that of a coal-mine'. The expansion of industry during the seventeenth and eighteenth centuries required ever larger amounts of coal and the consumers also became dependent upon a secure source of supply. Both of these factors were important in the move of many manufacturers and merchants into the coal mining business, in addition to the need to control the cost of supply. This is shown in Gray's Chorographia, in 1649, where he mentions a group of Londoners buying 30 year mining leases on the Tyne. One of the advantages that these early entrepreneurs and capitalists had was a cheap source of capital. Even though inflation was relatively high during the sixteenth and early seventeenth centuries, the Usury Laws kept the cost of capital very low. The maximum rate of interest that could be charged was lowered from 10% to 8% in 1625 and then further reduced to 6% in 1657 and 5% in 1714. Subsequently, in 1720, the bursting of the South Sea Bubble led to the introduction of legislation that effectively halted the development of equity financed companies with limited liability. Until the `Bubble Act' was repealed in the nineteenth century, only a few companies were set up with the equivalent of limited liability under the aegis of a Royal Charter. Consequently, most of the development of the coal-mining industry was undertaken by groups of merchants who had access to family capital and who could also borrow money from each other. In the nineteenth and early twentieth centuries one further constraint on the mechanisation of the British coal mines was the lack of available capital in the industry. This was exacerbated by the great

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railway boom of the 1840s, which also attracted much of the free capital available. Indeed, by December 1845 there were 260 different railway shares (including preference and debenture stock rather than just basic equity capital) quoted on the London Stock Exchange, and in 1846 a total of 273 railway bills received Royal Assent. These new companies were made possible by the 1844 Registration Act which was then extended by a second Act in 1856 that offered limited liability to all companies registered under the 1844 Act. Whilst new companies went straight to the equity market for funds, many private concerns in the coal, engineering and iron industries just took advantage of the protection offered by limited liability status. This was particularly important because a profitable mine could be brought down by the bankruptcy of a shareholder. It was intended that the removal of personal liability would prevent this from happening.

1.4 Transport Whilst the nineteenth century development of the railways boosted demand for coal the inadequate transport network in earlier centuries forced up the price of coal away from the pit-head. It was not until the 1750s and 1760s that canals, and other advances in transportation, helped to reduce the price of coal to levels that started to stimulate demand. These years also saw an increase in coal exports from England and Wales and began the start of a major export industry for the country (Fig. 1.3). The middlemen who transported coal by sea to London also charged for their services, and the retail price of the coal was about 24s 3d for a London chaldron at Westminster in 1700. The `chaldron' was a unit of weight that was in use in both London and the Tyne. However, the Tyne chaldron seems to have varied in size over time thereby making comparisons difficult. In London the chaldron was equivalent to some 28.5 hundredweight or 3192 lbs (1.45 t) and the price of coal therefore works out at some 16s 9d/t ± a mark-up of about 600%. The high rates of inflation during the period may take some of the blame for this but much of the increase in price is related to the actual cost of transport. Nevertheless, the merchants had something of a monopoly on the transport of the coal from the coalfields to London and made use

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1.3 United Kingdom coal exports 1697±1939 (source: Kernot, 1993; Mitchell & Deane).

of this by making sure that their profits kept pace with the inflation of the period. In 1590 the Lord Mayor of London complained that the price of coal had risen from 4s to 9s a chaldron since the early 1580s when the Grand Lease of Newcastle traders was set up as a monopoly. In 1600 the Grand Lease was formally incorporated by Royal Charter as the Company of Hostmen. There were originally 24 important partners in the Grand Lease but by 1622 the number of members of the Company of Hostmen had grown to 31, as the profitability of the enterprise became known. As the cost of coal transport in the early 1700s was so great, the expanding metal mines started to ship their output to the coalfields rather than the other way around. For instance the much greater amount of coal needed to smelt the copper and tin produced from the mines of Devon and Cornwall meant that it was cheaper to take the ore to Swansea for smelting where coal was around half the price that would have to be paid in Cornwall. Coal still had to be transported to Devon and Cornwall to power the pumping engines but this was relatively insignificant in comparison with the amount of coal needed in the smelting operations. Bristol also lost out to the cheaper fuel from Wales despite its better position to supply end markets. Indeed, by 1750 over half of the total copper and lead production of the country was smelted on the south Wales coalfield.

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1.4.1

Canals cut costs

The British road network was poorly maintained and often impassable during spells of bad weather. This meant that internal trade was often slow and expensive and that access to many parts of the country in the mid-eighteenth century remained difficult despite the vast expansion in navigable rivers. Where canals had been started they were only relatively modest in scope and did not have a great effect on the movement of produce. However, the last 30 years of the eighteenth century saw a massive move to canal construction with the result that many prices fell, sometimes drastically, as the availability of produce increased. In 1724 there were some 1000 miles of navigable rivers, an amount that had doubled over the previous century. For instance, Liverpool council stated its desire to improve the waterways in the south Lancashire and Cheshire district and ordered surveys to be taken to help in the task. In particular, they wanted to improve transportation between the river Ribble and the Wigan coalfield, and along the Mersey, both south using the river Weaver to get to the Cheshire saltfield at Winsford and north up the river Irwell to that coalfield. The most famous canal of the period was that constructed for the Second Duke of Bridgewater between 1759 and 1761, in furtherance of a project started by his father. The canal was built by James Brindley and included an aqueduct and 42 miles of underground waterway to take the Duke's coal from his colliery at Worsley almost to Manchester. The last stretch of the canal into Manchester was completed in 1763 and was helped by the low level of interest rates at the time. The construction of the canal at a price of some 10 000 guineas a mile halved the price of coal in Manchester and led to a massive increase in the number of other canal proposals. Indeed, like motorways that attract traffic, the reduction in the price of coal brought about by canals stimulated and increased demand to such an extent that they provided a high initial return on investment. Such was the increase in the demand for coal from the Duke's mine that he is reported to have said that `a navigation should have coals at the heel of it'. And in 1785 J Phillips' book A Treatise on Inland Navigation stated that the Duke's `mine had lain dormant in the bowels of the earth from time immemorial without the least profit

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to the noble owner, on account of the price of land carriage which was so excessive that they [the coals] could not be sold at a reasonable price'. The success of the Bridgewater Canal and the massive boom in canal construction across the country can be shown by the large number of Private Bills sponsored through Parliament to authorise the building of the new waterways. Of the 165 Canal Acts that were passed through Parliament between 1758 and 1802 there were 90 that expected coal to be the major commodity carried. The main link from the Midlands to London was started in 1793 and completed in 1805 when French privateers were causing trouble along the coastal routes. Additionally, a total of 160 miles in the vicinity of Birmingham gave a great impetus to the construction of collieries in the Midlands coalfield as they gave access to the sea as well as to London. Between 1724 and 1815 the increase in the availability of water transport had been phenomenal, with a further doubling in the length of navigable rivers to 2000 miles and some 2200 miles of canal network had also been constructed.

1.4.2

The age of the train

The invention of the rotary steam engine and the age of the train led to a massive increase in the demand for coal. Not only was it required for the obvious powering of the engines themselves but also it was needed to make the iron both for the trains and for the tracks. The great age of the railways really started in the 1840s and continued for much of the rest of the century, helping to spur the development of the coal-mining industry at the same time. Indeed, between 1841 and 1901 the mining areas attracted around 500 000 people from rural parts of England and Wales and by 1851 there were 216 000 men and 3000 women employed as coal miners throughout the country. Although the Stockton and Darlington, the first public railway line with a moving steam powered engine, did not open until 27 September 1825, the initial work on steam engines had started at the end of the eighteenth century. This was encouraged by the need to transport the coal from the pit-head to roads or rivers where it could then be shipped to other parts of the country. Initially, during the seventeenth century, large collieries placed wood on the ground to ease the movement of wagons. In the early eighteenth century the

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greater availability of iron meant that the wood started to be replaced by iron plates, particularly at bends where the wear was greatest. In 1767 the first track was laid by Richard Reynolds from Coalbrookdale to the river Severn. It used rails with flanges to keep the wagons in place but, as this was found to be inefficient at keeping the wagons on the rails, the flanges were transferred from the track to the wheel following the advice of John Smeaton in 1789. The Stockton and Darlington was a particularly important railway in view of its effect on the movement of materials. Like the development of the canals some 40 years earlier, this railway's prime motive was to transport coal in order to break the effective monopoly on the production and distribution of coal held by the colliery owners of the Tyne. The construction of the railway was intended to open up the country to the south so that new mines could be dug and the monopoly broken. It was the idea of a group of three Quaker businessmen, Pease, Richardson and Backhouse, and was made possible because of the invention of a movable engine rather than one that was fixed in position and wound wagons using a cable. The power of the engine had also been increased by George Stephenson who was able to improve engine efficiency by increasing the draught of the fire box so that it could pull more than its own weight. He first built locomotives for the Killingworth Colliery in 1814 and served as the engineer for the Stockton and Darlington railway. This experience must have helped him to win the Rainhill competition on the Liverpool and Manchester line between 6 and 14 October 1829, which showed that steam engines could offer faster travel than other alternatives. As with the canals, the opening of new railway lines reduced the price of coal in the areas they served, and this helped to increase the demand for the product. By the end of the 1840s a skeleton network of some 5000 miles of track had been completed, whilst by 1886 the final total of 16 700 miles of track had been laid. Overall, however, there were periods during which the expansion of the mining industry could not keep pace with the development of the railways and the price of coal was forced up. This was often only a local effect in areas of iron and steel production as manufacturers needed to purchase coal in order to maintain and increase output. It must also be related to the integration of many coal and iron companies which would supply their own plants first before selling any excess production on the open

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1.4 Coal prices fob export 1831±1913 (source: Mitchell & Deane).

market. If there was insufficient coal to meet demand then the price would be forced up because of the need to transport it from collieries further afield. The fall in price is shown if Fig 1.4 is compared with Fig 1.1 detailing the price of coal delivered to Westminster School in London. Fig 1.4 also includes a real price index to show how the deflation of much of the nineteenth century led to a real rise in the price of coal.

1.5 The social cost There can be no discussion of the history of coal-mining without reference to the social cost of the industry. The early miners in the United Kingdom had little in the way of protection and rights of employment and the yearly bond by which a miner was tied to a specific colliery was often the subject of a dispute. The other main problem covered the legislation of the period with one particular Act in 1610 stating that any able-bodied person who even threatened to run away from his or her parish could be sent to a house of correction and be treated like a vagabond. The other restriction of the yearly bond was that it would last for a year less one day. This was because of the Poor Law legislation which meant that a parish had to look after any inhabitant who had

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spent more than one year within its boundaries. If a miner had to travel to a different parish to work there was often much disaffection between the new arrivals and the original inhabitants. This was particularly the case with small villages far from large-scale habitation that could be overwhelmed by an influx of miners to open up a new colliery. In 1606 the inhabitants of a Shropshire village complained to their landlord that the new colliery had brought with it `a number of lewd persons, the scum and dregs of many [counties] from whence they have been driven'. As already mentioned, the seventeenth and eighteenth centuries saw an increasing amount of industrial specialisation as miners started to concentrate fully on mining with little time spent on the farms of their landlords except, perhaps, at harvest time. The sparse population in many rural areas also failed to help matters as the increasing need for manpower meant that local food production could not be maintained if a mine was to be opened up. It was therefore necessary to import labour into new coalfields and to ignore the resentment shown by the indigenous population. One of the areas particularly deficient in inhabitants was Wales and the Society of the Mines Royal was given the right to conscript labour in the country in 1625. The power of the local lord was often sufficient to put down any complaint during the pre-industrial age. This was partly because of the relatively small number of employees working in any one mine and partly because of the still feudal nature of society at that time. Indeed, the feudal nature of the coal-mining industry in Scotland continued into the nineteenth century with the employees being included in any purchase agreement over a mine. It is only during the late eighteenth and early nineteenth centuries that the increasing size of the workforce meant that it could start to organise itself to greater effect. It was also the case that the increasing move to towns and cities meant that the feudal system started to break down and that the control that could have been exercised in the past became less effective. The increasing wealth of merchants and the power that this conferred on them also meant that the authority of a local lord was reduced. The merchants then came to usurp the previous system of feudal control and often purchased property directly, whether for mining or agricultural purposes or both. One of the most significant Parliamentary enquiries into the state

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of employment in the British coal mines was the First Report of the Commissioners on the Employment of Children, which covered their employment in coal mines and was published in 1842. The Commissioners set themselves to look at 14 separate aspects of children's employment, including their ages and the hours that they were expected to work. One of the most revealing details was the very young age of many of the children who worked in the pits, often with very little supervision and left for long periods on their own in the dark. `The lowness of the roof or the thinness of the bed of coal . . . is no doubt the cause of employing boys instead of horses or asses' to move the coal was one of the conclusions of the report, which found children as young as six or seven at work. The publication of the report led directly to the Mines Act of 1842, which forbade the employment of boys under ten and all females with a penalty of £5 to £10 for each offence. The numbers of people employed per thousand adult males (of which there were around 200 000 at the time) is shown in Table 1.1. This preoccupation with the value of life in the industry led to the formation of some of the most militant unions to represent the miners in their claims for better pay for the work which they undertook in such frightening conditions. Table 1.1 Number of individuals employed in British coal mines per 1000 adult males County

Adult Females

Leicestershire Derbyshire Yorkshire Lancashire South Durham Northumberland & N Durham Mid Lothian East Lothian West Lothian Stirlingshire Clackmannanshire Fifeshire W. Scotland Monmouthshire Glamorganshire Pembrokeshire

22 86 333 338 192 228 202 184 19 424

13 to 18 Males Females 227 240 352 352 226 266 307 332 289 283 246 243 223 302 239 366

36 79 184 296 154 129 213 109 19 119

Under 13 Males Females 180 167 246 195 184 186 131 164 180 184 142 100 99 154 157 196

41 27 52 103 109 107 87 34 12 19

Source: First report of the Commissioners on the Employment of children in mines.

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1.6 The start of unionism Many of the problems of poor working and living conditions were beyond the control of the miners during the nineteenth century. The British population was increasing at a much faster rate than in earlier centuries and this led to a greater pressure on the workforce to find employment. This meant that there was often little option but to accept the conditions laid down by the mine's management during the early part of the period. Indeed, the lower standing of the workforce can be seen from the civil offence with which employers were charged for breach of employment contract, rather than the criminal offence with which the employee would have been charged for a similar offence. As time progressed, the widening of the voting register helped to introduce a fairer spread of views in Parliament with a succession of Commissions, Enquiries and Acts during the century. As far as the mining community was concerned, the first whisperings of unionism had started in the years following the defeat of the French at Waterloo. The recession between 1825 and 1840 led to the start of several small unions that sometimes succeeded in achieving their aims and were sometimes defeated by the employers. Nevertheless, as the scale of industrial operations became larger, it became necessary to treat the workforce on a collective basis. It followed that the repeal of the 1799 and 1800 Combination Acts was required so that the formation of employee groups, which could engage in collective bargaining, was possible. These Acts were repealed in 1824 and 1825. The spread of political thought also moved into the mining communities during the nineteenth century, although there appears to have been little influence from the Chartist movement in the 1840s. This may have been part of the reason for the delay in the miners getting the right to vote until the Reform Act of 1884. This followed from the previous Act of 1867 (when working men in towns were enfranchised) and the widening of the franchise and redistribution of seats which was given in 1832. Despite this the first miners to be elected to Parliament in 1874 were Alexander Macdonald and Thomas Burt, both of whom sat as Liberals.

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2 International discoveries 2.1

Introduction

2.2

Australia

2.3

Bulgaria

2.4

China

2.5

Hungary

2.6

Indonesia

2.7

Poland

2.8

South Africa

2.9

United States of America

# Charles Kernot

2.1 Introduction During the eighteenth century, the transport of coal in coasters from the north-east coast to its main market in London meant that the fuel started to become important to Britain's shipping industry. The expansion of the British colonies also made an important contribution to the size of the British fleet as a consequence of increasing trade, and this saw coal transported internationally to meet specific areas of demand. The nineteenth century development of steel production increased the amount of steel-hulled shipping and encouraged the use of steam engines for propulsion, thereby generating an increased demand for coal in locations further away from the source of supply. Initially, these steam ships were recharged with coal transported from the United Kingdom's own mines and stored in purpose-built bunkers around the world. However, the discovery of coal in other locations encouraged the development of local production given the economic advantages this offered. In addition to the need for coal to power growing international trade, the economic growth of many countries also increased their demand for energy ± and hence coal. The early industrial heartlands of the United States were centred in areas where coal was readily available to provide cheap power. This was also true of France, where the steel and metallurgical industries were centred in the north-east of the country and in the central region of the Massif Central, where coal and iron ores were also available. Moreover, as indicated in the previous chapter, the United Kingdom did not hold onto its market dominance for long. Indeed, mines developed with the technology of the eighteenth or early nineteenth centuries were unable to compete with the mines constructed later in the nineteenth or in the early twentieth centuries. Indeed, the first mines effectively just scraped coal from the surface ± with little need for deep mining and the associated high requirements for and costs of both capital and labour. Coal deposits in other parts of the world benefited from nearsurface locations, which had been exhausted in the United Kingdom, and also from very amenable geology. This meant that the coal could be mined more easily and efficiently ± especially with the benefit of newly devised techniques, which would be expensive to retrofit into

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existing mines ± and this helped other industrialising countries, particularly the United States, to overtake the United Kingdom's economic dominance in the early part of the twentieth century. It is interesting to note that whilst countries like Belgium and France increased coal production rapidly in the nineteenth and early twentieth centuries, their industries have now almost completely closed. This reflects the low level of reserves present in these countries, which meant that they were unable to sustain demand for any considerable length of time. The United States, conversely, saw a steady increase in production into the middle of the twentieth century but then, as oil became the dominant source of energy, there was a marked decline in local coal production. This situation is now reversing with increasing demand for electricity ± which can often be more economically generated from coal. Figures 2.1 and 2.2 show coal production in the United States and France to indicate the different levels of output from the two countries, and can be compared with Fig. 1.2, which details coal production in the United Kingdom. In recent years, the global coal sector has seen some consolidation. This has been driven by low coal prices and a desire of some organisations to stem losses, whilst others have hoped to improve profitability through economies of scale and other mining-related benefits. Strategic decisions by the major oil-producing companies to pull out of coal-mining, so that they can concentrate on their core oilbased operations, have also influenced mergers and acquisitions across the sector. This strategy has seen disposals by Arco and Shell,

2.1 US coal production 1831±1998 (source: EIA, OECD; Facts about coal; Author).

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International discoveries

2.2 French coal production 1850±1997 (source:OECD; Author).

whilst other oil companies such as Total (especially now that it has merged with Elf), Exxon and BP Amoco may not be far behind. The coal assets that have been offered in this way have largely been purchased by large conglomerate mining companies rather than by companies concentrating on the sector. This is a strange situation given the wide-ranging acquisitions of operations in the aluminium sector by companies such as Alcoa and Alcan, which would offer them the opportunity to supply customers on a truly global basis. The same is true of the copper sector, but coal mines have either been subsumed into large organisations or have been bought by coal-mining companies with operations in a single country. The other point to bear in mind is that the companies that have bought into coal assets have not been selective about the type of coal purchased, which means that most coal-miners have a range of coking and thermal coal operations. Whilst there are synergies offered by a knowledge of coal-mining technology and techniques the ability to market and sell the final product is paramount for a successful operation. In this case, the two different markets for steam and coking coal are not served by dedicated organisations but, rather, by companies with a broad specialisation across the sector. From an international perspective it is also important to ensure that any acquisition of a mine or a deposit has sufficient infrastructure and access to enable the mine to operate with minimal additional costs. Furthermore, an existing or potential market in the form of a local electricity producer or steel mill could well add to the attraction

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of an operation. This is because it may be able to sell the coal at either the same or at a slightly lower delivered price than that obtainable by the consumer from other sources but still at a higher price than it could obtain elsewhere. If coal is being produced for the export market then access to road, rail or sea will be of prime importance and is one of the reasons for the impressive development of the Australian coal-mining industry.

2.2 Australia The first non-Aboriginal discovery of coal in Australia was made by William Bryant, an escaping convict, at the mouth of the Hunter River near Newcastle in New South Wales in 1791. Subsequently, in 1797, the first coal mines were built, supplying the bulk of the country's domestic needs. Moreover, the relative proximity of Australia to the other British colonies of the Pacific and Indian oceans helped in the development of an export industry and in 1799 coal was the first mined product to be exported from Australia when it was shipped to Bengal, India. At that time, annual exports only amounted to some 4000 t in comparison with New South Wales's current exports of around 75 Mt. The first official coal-mining operations were set up as a monopoly by the State Governor, Philip Gidley King in 1801, and employed convicts as miners in increasing numbers. By 1804 some 128 convicts worked in the operations, increasing to 553 in 1817. Even the first private mining operation employed more convicts than free men from its foundation in 1831 until 1843. This operation was set up near Newcastle by the Australian Agricultural Company (AAC) and produced 40 000 t in its first 12 months of operation, supplying coal to various steamships including Sophia Jane, the first paddle-wheel steamer to enter the Sydney Heads. Like the first government-run mine, AAC's operation was run as a monopoly but this was eventually overturned in 1847 and production expanded dramatically so that by 1868 it had increased to 18 times the 1848 level. Mining production in New South Wales continued to expand, reaching 1.3 Mt in 1881, 1.5 Mt in 1888 (when total Australian output reached 2.5 Mt) and 3.5 Mt in 1900 as more deposits were discovered and mines constructed. Some of these deposits contained coal with

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better characteristics than the initial discoveries, including the Borehole Seam near Newcastle (1850) and the Bulli Seam in the Illawarra district, which was found in the 1850s and contained a good coking coal. The development of associated industries, such as coke manufacture, iron- and steel-making and town gas generation for street lighting, increased demand, and production from these discoveries was able to provide supplies. One of the least expected locations for a coal mine is under Sydney harbour but construction of the Sydney Harbour Colliery started in 1897 after drilling proved the geological theory of a deep coal basin in the area. At this time the attraction of reduced transport costs offset the 2900 feet depth of the 10 foot coal seam discovered by the drilling, even though only a relatively small proportion of the coal could be extracted given the requirement to support the roof of the mine. Shaft-sinking took five years to complete and, initially, intersected several thin seams. This disappointment led to the reconstruction of the company and a decision to mine in the direction of the original drillhole discovery. Whilst the thickness of the seam improved, the company failed to generate any cash and mining eventually ceased in 1915. In 1924 the mine was restarted by Sydney Collieries Ltd but continuing financial problems required a second capital reconstruction as a co-operative, with the miners operating as the Balmain Coal Contracting Company Ltd. This scheme was successful for a short time but by 1931 the worldwide depression and industrial problems forced the companies into liquidation. Some work has since been undertaken looking into the possibility of extracting methane from the coal seam but this, too, has proved unsuccessful. In 1909 the mines in New South Wales were paralysed by a lengthy strike, and Victoria, which had relied on New South Wales for its coal, looked for alternative sources of supply. Coal had already been discovered at Wonthaggi, 150 km north of Melbourne, and the state government authorised the development of an emergency coal mine to stave off the threat to local industry caused by the closure of the New South Wales collieries. With a depression in the local gold-mining areas around Bendigo, the new mine attracted over 2000 individuals with aspirations of working in a state-controlled operation. Unfortunately, state ownership did not live up to expectations with the local authority refusing to

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give the mine a monopoly position in supplying Victorian demand. Moreover, the colliery was placed under the management of the railways department, which had little practical knowledge or understanding of the industry. Strikes occurred even in the early years of operation and continued to be a factor of the entire life of the Wonthaggi State Coal Mine, which became a hotbed of Australian unionism. This was enhanced by the dire working conditions at the colliery and by the loss of at least 80 lives during the 59 years that the mine was in operation. Over this time the miners produced at least 16 Mt of coal, sometimes waist-deep in water, given the proximity of the mine to the sea. Nevertheless, the colliery eventually closed due to exhaustion on 20 December 1968.

2.3 Bulgaria The first state-owned coal mine opened in Bulgaria in 1891 and production increased rapidly thereafter to meet increasing local demand for the fuel. From output of around 130 000 t/year in 1900 production rose to 6 Mt/year by 1950. In the initial years all mining was carried out using underground techniques but, as equipment became larger and more efficient, open pit mining was also practised, as at the Maritza Iztok mine which opened in 1950. Peak production from Bulgaria's mines of around 38.5 Mt/year was achieved between 1986 and 1989, although production has since fallen considerably. The active mines still contain significant reserves and resources including 2.7 bn t of lignite, 324 Mt of brown coal and 11 Mt of black coal, which is still not considered a high quality coal. Internal consumption of coal is 85% for electricity generation, 4% for heating and 11% for other purposes. From the consumer's viewpoint, coal generates 39% of Bulgaria's electricity and provides 70% of domestic heat and power. This is achieved through 12 coal production companies, which have all been transformed into joint stock companies. The companies control over 20 mines, which in 1997 produced a combined total of 30 Mt, utilising both open pit and underground extraction methods. Bulgaria's coalfields can be zoned according to the quality of the coal that they contain. The south-west energy region stretches

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westwards from Sofia to south-west Bulgaria and includes the Sofia, Pernik, Bobov Dol and Oranovo Simitli coalfields, where a pilot mine closure programme has been initiated. The Marishki energy region comprises the east and west Maritza coalfields and the mines are located close to the regional power plants. Finally, the Sliven energy region comprises the Cerno More and Balkan mines, and is located in eastern Bulgaria.

2.4 China Coal-mining was one of the few major industries that had been developed before the Communist takeover of China, with production previously peaking at 66 Mt in 1942. This level of production was next seen in 1952 as the country recovered from the civil war that brought the Communists to power. The subsequent introduction of the country's first five year plan led to a resurgence in output growth as a direct result of increasing investment in the industry to about 12% of the State's total industrial budget. The second five year plan led to an emphasis on small-scale mining (which is now being closed down ± see Chapter 9) but this was not without problems at the time and between 1957 and 1960 about 110 000 small operations were opened in an attempt to increase local self-sufficiency. By 1974 small mining operations accounted for around 28% of total coal production within China. Most coal in the country is steaming or semi-soft coking and China, therefore, still needs to import hard coking coal to supplement its indigenous needs. In the period before 1960 growth in China's coal production was nearly 20% per year, but this fell markedly in the following 15 years to an average of only 2.8% per year. As a consequence of both the slowing in output growth and increasing oil and natural gas production, the overall share of coal in China's primary energy supply mix has fallen from almost 100% to only 73% of the total. Output of coal in China is detailed in Fig 2.3. The privatisation programme in China now means that many of the larger coal mining operations are looking for outside sources of capital. Two mining companies have so far been listed on local stock exchanges (Yanzhou Coal and Yitai Energy) and although the programme was halted in the late 1990s, as a consequence of

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2.3 Chinese coal production (source: Howe, 1978; China Coal Industry Yearbooks; Author).

economic instability across the Asian region and the low price of coal, it is expected to restart as economic growth picks up. China's known coal reserves of 264 500 Mt place the country third in the world league table, after those of the CIS and the United States. Most of the coal deposits are present in rocks of Carboniferous, Permian or Jurassic geological age, but have a great advantage in that the seams are often very thick, flat and shallow. These factors help to reduce mining costs, although they also sometimes require innovative mining techniques such as sub-level caving above a longwall, with the coal drawn from behind the supports. The recoverable tonnage of coal is split between 129.5 bn t of bituminous coal, 81.7 bn t of sub-bituminous coal and 53.3 bn t of lignite. In 1991 the average heating value of all coal mined in China was 22 GJ/t, with a sulphur content of 1.1% and an ash content of 30%. Two-thirds of all reserves are situated in the provinces of Shanxi, Shaanxi and Inner Mongolia. The bulk of the country's reserves of coal are located in western China, although only a modest proportion of output comes from the region as demand is concentrated in the east of the country. This problem is being addressed in many ways but mainly through investment in infrastructure. This is shown by the 2.5 times increase in the transport of coal between regions between 1952 and 1956, and that by 1956 coal accounted for 40% of all rail freight and remains at a very high level.

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2.4 Hungarian coal production (source: SZEÂSZEK; Author).

2.5 Hungary Peak production of coal in Hungary was in 1965 when some 31 Mt was produced from 134 coal mines that employed between 125 000 and 130 000 individuals. The number of coal mines has fallen consistently since then with 20 mines in 1996 and 19 in 1998. About 90% of the coal production in the country is destined for electricity generation (see Fig 2.4). By the start of the 1980s, the coal-mining industry in Hungary, centred around eight districts and was controlled through the  ). The district around National Ore and Mineral Mines Company (OEÂA Mecsek in south Hungary produces hard coal, although the majority of the country's production is of brown coal, from mines spread along the northern border with Slovakia. The first deposits are situated along the Austrian border to the west, then moving eastwards, there are the Ajka, OrosziaÂny and TatabaÂnya regions. To the east of Budapest the Borsod region sits along the Slovakian border, whilst just inland is the MaÂtra district, which is a lignite producing area. During the 1990s the Hungarian Government instituted a process of change across all sectors of the economy, with local prices starting to move towards world market levels. Unfortunately for the coal industry, this meant that prices were lowered and this, in turn, led to an increase in debt as local mining companies were unable to reduce costs to match the fall in prices. Indeed, during the

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period 1991±6 the coal-mining industry received subsidies of Ft4938 m (US$40 m). In 1990 the Hungarian Government set up the Restructuring Centre for Coal-Mining (SZEÂSZEK) to reorganise the structure of the industry. SZEÂSZEK, in turn, set up joint stock companies to control the mines and sell all of their output. The subsequent privatisation of the  began in 1991, with initial concentration on the metalliferous OEÂA mining activities of the organisation. One of the events that promoted the privatisation of the industry was the passing of enabling legislation by the Hungarian Government in 1993. The Mining Act introduced a range of Mining Laws that vested all in situ mineral resources in the state and allowed mining to be authorised by one of two routes. The first method is through a traditional permit granted to mining companies by district mining authorities for unclaimed areas. The other route is through a mining concession that covers closed areas. As with many Eastern European countries, most of the organisations had various subsidiary activities under their control, which had to be subsidised from their own budgets. As part of the initial move towards the privatisation of the industry the subsidiary companies were spun out into separate satellite organisations. At the same time the coal-mining companies were restructured into three organisations that integrated the coal mines with the power companies.

2.6 Indonesia Indonesia has long been known as a coal-producing nation and coal-mining is talked about by Joseph Conrad in some of his books set in the region around the end of the nineteenth century. Indeed, coalmining in the vicinity of Ombilin, some 55 km north-east of Padang, the capital of western Sumatra, has been known for at least 100 years. Nevertheless, production from the underground mine, Ombilin 1, has recently ceased due to the exhaustion of reserves, although it used to be trucked and railed to the port of Teluk Bayur for export and for domestic use at Padang. In southern Sumatra the coal basin covers an area of approximately 20 000 km2 and was investigated by Bataafsche Petroleum Maatschappij prior to 1942. Between 1975 and 1976 Shell Mijnbouw

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carried out a range of exploration work in the area, including general surveying and drilling, but did not proceed with any further investigation. The Directorate of Mineral Resources then regained the property and the state coal-mining company PT Tambang Batubara Bukit Asam (Persero), or PTBA, was established under Indonesian Government Regulation No 42 in 1980 and Notarial Deed No 1 on 2 March 1981. A further exploration and drilling programme on the property was authorised in January 1982. This work was carried out between 1983 and 1986 and concentrated on the northern flank of the Muara Tuga anticline. Nevertheless, economic exploitation was prevented by the inaccessibility of the deposit and the consequent inability to transport coal out of the area efficiently. The situation changed when a railway was constructed from the deposits in the Tanjung Enim region to the dedicated coal port of Tarahan on the south coast of Sumatra and some 420 km from the Tanjung Enim mining operations. A railway was also constructed to the dedicated coal port of Kertapati 165 km away and close to the capital of Sumatra, Palembang, which is located 180 km to the north-east of Tanjung Enim. PTBA then proceeded to develop the Tanjung Enim mining operations and now produces 9 Mt/year from a number of open pit mines in the vicinity of the town. In October 1990 Government Regulation No 56 merged PTBA with PT Perum Tambang Batubara so that all of the country's state coal-mining operations were controlled through one organisation. In 1996 all of Indonesia's coal was vested in PTBA, with the company receiving a royalty equivalent to 13.5% of all coal mined in the country. The royalty was payable in cash and was to be calculated on an ad valorem basis using the price at the point of sale. The royalty income was to have been paid to the government within one year of the date of receipt. This vesting has since been rescinded and independent coal-mining companies now pay their royalties directly to the Indonesian State. Indonesia's coal production in recent years and the phenomenal growth of production as a result of the construction of new mining operations in Kalimantan are detailed in Fig 2.5.

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2.5 Indonesian coal production (source: Indonesian Coal Mining Association).

2.7 Poland For the 40 years following the Second World War, Polish mining enterprises were encouraged to maximise tonnage, almost at any price. Economic reform measures were introduced in Poland between 1990 and 1992 and so the country is more concerned with ensuring that resources are mined to the best advantage. This is a factor underlined by the Geological and Mining Code that was introduced in 1994. In 1997 Poland's coal-mining industry suffered a fall in profitability of 5.7% against a fall of 0.4% for the mining industry as a whole. In early 1999 the Ministry of Environmental Protection, Natural Resources and Forestry introduced changes to the country's mineral resources policy. This centred on environmentally compatible development, ensuring security of energy supplies and a targeting of mineral output to ensure that it was commensurate with the country's needs.

2.8 South Africa The Vaal River coalfield was discovered in 1878 by George Stow, a geologist commissioned by the Orange Free State Volksraad to

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undertake a geological survey of the northern part of the Province. During his exploration work he discovered coal near the junction of the Vaal and the Taaiboschspruit rivers. The extent of the deposit was soon confirmed, stretching from Maccauvlei in the east to Leeuwspruit in the west. Unfortunately for Stow, the Volksraad had been hoping that the geologist would find precious metals or diamonds (which had been discovered elsewhere in South Africa over the preceding decade) and cut off his funding when he reported the discovery of a large deposit of coal. Convinced of the value of the coal, Stow looked elsewhere for a new source of funding. In the diamond town of Kimberley he met Sammy Marks, a Lithuanian who had emigrated to South Africa in 1868 and had become hugely successful in the diamond industry. Following Cecil Rhodes's introduction of water pumps, there was an increasing need for fuel in the Kimberley area and, recognising this, Marks formed an association, or Vereeniging, which included Stow, to acquire the land for exploitation of its coal resources. Stow was appointed the manager of the operation and trial mining for coal commenced in 1880. As this was a success, full development of the coalfield was undertaken and the Bedworth Colliery was established in 1882, producing 360 t in its first year and 720 t in 1884. Most of the production from the mine was destined for the diamond operations to the east, although the gold discoveries near what was to become Johannesburg also provided a potential new market. However, full access to Johannesburg awaited the development of a railway linking the coal mine across the country to north and south and providing additional contracted demand to fuel the trains. By the end of the 1880s the coal mine had branched out into associated businesses, particularly bricks, tiles and refractories, which could be produced from clays found adjacent to the coal deposits. Agriculture and forestry were also initiated on the land that the association had acquired, with the forestry division concentrating on the provision of timber for the mines. The need for additional capital encouraged the owners to look to the stock market, and Vereeniging Estates Limited was incorporated on 26 August 1897 with an initial capital of £730 000. By the Boer War, the company had expanded into two new mines, Cornelia and Central, but production suffered as a result of the conflict. The Central Mine

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Table 2.1 Expansion history of Vereeniging Estates Colliery

Date

Bedworth Cornelia Central Largo Schoongezicht Vryheid Bertha Shaft at Cornelia

1882 By 1900 By 1900 Acquired early 1920s Acquired early 1920s Acquired 1928 1941 September 1945 Acquired 1949 Opened 1950s Opened 1950s Opened 1950s Acquired 1950s Acquired 1950s 1978 1979

Springbok New Largo Springfield Schoongezicht Two Blesbok Blinkpan Koolmyn Kleinkopje New Denmark

Comments

By 1926 output reaches 2m tons By 1933 output reaches 3m tons By 1941 output reaches 5m tons Acquired by Anglo American By 1949 output reaches 12m tons

By 1964 output reaches 16.7m tons

Source: Anglo American; Author.

was also the location for the conference of Boer generals that preceded the Peace Treaty in Pretoria. Vereeniging Estates also started to benefit from the further expansion of coal demand in southern Africa (see Table 2.1). This saw the negotiation of a contract in 1910 to supply the newly formed Victoria Falls and Transvaal Power Company, which undertook to construct a power station adjacent to the mine. Under the contract the company undertook to supply 200 000 t/year of coal over a 14 year period at a guaranteed profit of 1s/t. In the period leading up to the Second World War production continued to increase and in 1936 the group combined most of its mining interests with those of the African and European Investment Company to form Amalgamated Collieries, which remained controlled by Vereeniging Estates. After the war Anglo American acquired a controlling interest in Vereeniging Estates in order to obtain gold mine holdings in the western Free State; the coal assets were almost considered as a sideshow. Post-war expansion yielded additional coal supply contracts and underwrote the future of the group through the provision of a regular income from South Africa's electricity generating stations. By the 1950s some 60% of the group's output was sold directly to pithead power stations operated by the South African Electricity Supply

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Commission (Eskom). Anticipation of continued increases in the demand for electricity within South Africa encouraged the company to look for more deposits amenable to the construction of an accompanying power station. This led to successful tenders for the Arnot and Kriel power station contracts in 1965 and 1970, respectively. With the domestic market fully supplied, the company, together with its competitors in the Transvaal Coal Owners Association (TCOA), started to look internationally for new customers and expansion opportunities. In order to ensure international demand, it was first necessary to produce a low ash coal ± effectively increasing the energy content of the coal through the reduction of the amount of waste that would have to be transported. This was achieved by Vereeniging through a two-stage beneficiation process of coal produced from the Witbank No 2 seam, with the remaining fraction sold as steam coal to local power stations. The TCOA then had to develop a market for the coal, and negotiations commenced with Japanese steel mills. In 1971 the two sides reached an agreement whereby the TCOA members would supply 27.8 Mt of coal over a 14 year period, with Anglo American supplying some 10 Mt of the total. As a consequence of the inland location of the collieries, the most important part of the project was the development of sufficient rail and port infrastructure to ensure that the coal could be delivered on time and in the required quantities. This required further negotiations, also including South Africa's port and rail authorities and the choice of a site at Richards Bay for the Richards Bay Coal Terminal (RBCT). Following a successful conclusion of a 570 km railway, the port and associated handling facilities with an initial capacity of 12 Mt/year were soon under construction and were commissioned on 1 April 1976 at a cost of R43 m. By the end of the 1970s the coal terminal had been proven a success and had started on the first of many expansions ± the first of which led to an increase in capacity to 24 Mt/year at a cost of R34m. The third expansion of the terminal cost a total of R385 m and led to almost another doubling of capacity, to 44 Mt/year, and commenced in 1980. At this stage, however, South Africa was embroiled in an international outcry over the continuation of apartheid policies and suffered from the imposition of sanctions by many international

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countries. This led to the loss of export markets in France, Denmark and Holland. Other countries were also expanding their international marketing of coal, and increasing competition developed from Australia, Colombia and the United States, depressing prices ± a situation exacerbated by the tail-off in global energy demand after the second oil shock. Nevertheless, in an attempt to reduce unit costs by increasing throughput the terminal embarked on its fourth expansion (known as the Phase 3 Upgrade) ± to 54.5 Mt/year in 1990±91 at a cost of R290 m. The latest, and final expansion, to 66.5 Mt/year at a cost of R205 m, was approved in 1996 and incremental expansions may be able to increase capacity to a maximum of around 70 Mt/year with current infrastructure. Coal is now produced from a total of 19 separate coalfields across South Africa, of which the 16 main areas are contained in six basins covering an area 500 km east±west and 700 km north±south. The rank of coal increases to the east, i.e. towards the port at Richards Bay, although the number and thickness of the seams tends to decrease. In the main bituminous coal-producing area of Transvaal/Gauteng the coal is mined from relatively thick seams, although anthracite production in KwaZulu Natal is from thin seams. Total recoverable reserves in the country are estimated at 55 bn t, of which only 1% is anthracite and 4% is of metallurgical quality.

2.9 United States of America The United States is now the second largest producer of coal in the world, after China. Coal was first used for baking clay by the Hopi Indians in what is now Arizona by AD1000. The first Europeans to record their discovery of the fuel were the Canadian-born Louis Jolliet and Father Jacques Marquette in Illinois in 1673, and then the La Salle expedition in 1680. It was later found by Huguenot settlers at Manakim on the James River near Richmond, Virginia, in 1701, where the first commercial mining started in 1748. As with the United Kingdom, the development of the railways and discovery of coal adjacent to sea or river transport spurred the domestic United States coal industry into life. The industrialisation of the country during the nineteenth century also spurred output growth,

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especially with the increase in iron and steel production during the century. Consumption continued to increase in the early part of the twentieth century, pushing up prices and encouraging new entrants to the industry. The supply±demand balance then started to move in consumers' favour after the domestic United States coal price peaked in 1923 and continued on a downward trend until the start of the Second World War. However, the discovery of the major coal deposits in Wyoming and the development of low-cost methods of extraction and transport reversed the decline. This situation was further aided by the 1970s oil crises and the nuclear scare at Three Mile Island to the extent that coal production in the United States is now over 1 bn t/year, in comparison with the 530 Mt/year produced in the mid-1940s. One of the best-known areas of coal production in the United States is along the Appalachian mountain ranges of Pennsylvania. The occurrence of coal within the state was first recorded by John Pattin at the Kiskiminetas River in 1751 and the fuel was used by the garrison at Fort Augusta during the winter of 1758. Mining from the Pittsburgh coal seam on Coal Hill (now Mount Washington) commenced in 1761. Further development of mining operations continued during the eighteenth century and George Washington burned coal at Stewarts Crossing (Connellsville) in 1770, whilst the fuel was also used by the arsenal at Carlisle during the American Revolution. As with Coalbrookdale in the United Kingdom, the naming of Carbondale in Lackawanna county in north-east Pennsylvania was a direct consequence of local deposits of coal. The city was founded by William and Maurice Wurts who were prospecting for coal and subsequently developed open pit coal-mining operations in the locality. In another mirror image of the mother country, the mine inspired the construction of the Delaware and Hudson canal in 1825 and a gravity railway from Carbondale to Honesdale. In June 1831 the city laid claim to the world's first underground anthracite mine, although some Welsh miners may disagree. Anthracite was discovered by Nicho Allen at Pottsville in Pennsylvania in 1790, and the town soon experienced boom conditions. This was due to the iron smelting operations that had been constructed in 1800 and expanded in 1806. By the 1860s some of the mines in the region had been sunk to depths of 1500 feet but there were few qualified mining engineers in the country. As a consequence,

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the mine owners turned to skilled workers from England, Scotland and Wales who had developed knowledge through practical experience. Some of the mining problems and the influx of British management to oversee a workforce of largely Irish origin, led to a feeling of discontent amongst the employees. During the 1860s and 1870s this led to the formation of a number of associations, including the Ancient Order of Hibernians and the more widely known Molly Maguires ± a miners' secret society that campaigned for improved working conditions. The disaster at the Avondale shaft in September 1869, in which 110 men and boys died (see Chapter 4), no doubt contributed to the discontent within the workforce and increased the overall level of violence in the mining communities. In order to find the ringleaders of the Molly Maguires, who were said to be behind the uprising, the mine owners hired the Pinkerton Detective Agency at a fee of US$100 000. The Agency then hired agents to infiltrate the Molly Maguires and obtain sufficient evidence to lead to convictions. On 21 June 1877 six members of the society were hanged at Pottsville and four others hanged at Maunch Chunk (now known as Jim Thorpe) in Carbon County. The four members of the society hanged at Maunch Chunk had been convicted of two murders; three of the four (Alexander Campbell, Edward Kelly and Michael Doyle) were convicted of the 1875 murder of John P Jones, a mine boss from the Lonsdale Mine in Lansford. The fourth, John `Yellow Jack' Donohue was found guilty of the murder of Morgan Powell, the boss of the Summit Hill mine in 1871. Controversy still surrounds the events and the trials as much of the evidence leading to the convictions was provided by the mine owners acting through the Pinkerton Detective Agency. Indeed, some still suggest that the prosecutions were instigated in order to suppress the nascent organisation of labour that the Molly Maguires represented. Nevertheless, there can be no doubt that the area was wracked with violence and that many people in positions of authority were murdered between the formation of the group in about 1857 and the crackdown on the organisation that began in late 1875. Unionism also became aggressive during the 1920s and 1930s in the eastern Kentucky coal district, which tends to produce coking coal along the Appalachian Mountains. Bloody Harlan commemorates the violence that erupted in Harlan County during disputes that highlighted working and living conditions at the time.

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Finally, coal was first discovered in the State of Ohio in 1808 and its coking properties meant that it was suited to local iron-making activities. Following the later discovery of major iron ore deposits in the Upper Midwest, demand for Ohio coal increased due to the burgeoning demands of the iron and steel industry.

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3 What is coal? 3.1

A fossil fuel

3.2

Coal classification

3.3

Composition and impurities

3.4

Energy content

3.5

Proximate analysis 3.5.1 Moisture 3.5.2 Volatile matter 3.5.3 Ash 3.5.4 Fixed carbon

3.6

Ultimate analysis 3.6.1 Carbon and hydrogen 3.6.2 Sulphur 3.6.3 Nitrogen 3.6.4 Oxygen 3.6.5 Chlorine 3.6.6 Sodium 3.6.7 Fluorine 3.6.8 Phosphorus

3.7

Coking coal

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3.1 A fossil fuel Coal is the word used to describe a rock found on a widespread basis around the world. The rock is generally assumed to represent the remains of vegetable matter that has been compressed and heated to the extent that much of the hydrogen, oxygen and other elements in the original material have been driven out, leaving a carbon-rich rock behind. Given that different types of trees or forests, leaves or spores, from swamps, deltas or other environments represent different building blocks, coal can have varying chemical characteristics, which can be important when considering where it can be used. Furthermore, it has no definitive physical crystalline structure, which means that it is not strictly a mineral, whilst the definitively structured diamond or graphite are carbon-rich minerals. No two coals mined in different parts of the world are the same, moreover, coals from different seams but in the same location may also exhibit significant differences and these can determine where and how it is consumed. The key determinants are not just how the coal formed but also what geological processes have affected it over time and how this has affected its current composition. As a consequence of its method of formation, coal is a sedimentary rock, probably the one of most economic significance, found in distinct layers or horizons within a sequence of other sedimentary rocks. Depending on the degree of geological activity to which the rocks have been subjected, the layers can be anything from near-surface and horizontal to deep and vertical, although the latter, because of the difficulty and relative cost of mining, are unlikely to be extracted for commercial use unless they are located near the surface. Before the process of burial and compaction coal would have been a peaty material ± rich in organic matter formed from the death and decay of plant life in massive swamps or deltas. As each layer of vegetable matter was deposited it would first have been subject to the usual processes of decay currently present at the earth's surface. This would have promoted the decomposition of the material until it became buried beneath other plant life that had also died and fallen to the ground. At this stage the presence of water would have been important as this would have provided a reducing environment, and slowed or prevented the rotting process which destroys much of today's plant life. Evidence of the reducing environment can be

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gleaned from the relatively high sulphur content of many coals, and with reference to swamps where peats are currently being formed. As any fan of the dinosaurs will remember, large tracts of the earth have, at various times, been covered with swampland, often in the deltas of rivers which drained into inland seas in much the same way as the Okavango river drains into a massive swamp and marshland in central Botswana today. The main feature of these areas was that they tended to sink relative to the surrounding land and that the delta therefore slowly filled up with thicker layers of sediment and organic material. The rate of sinking played an important part in the formation of the peat, as too fast a rate would have led to the drowning of the vegetation and allowed the deposition of deeper water sediments such as shales and silts. Too slow a rate would have allowed the possibility of too much erosion to occur, thereby preventing the build-up of seams of sufficient breadth or thickness to be economically viable. If the rate at which the swamp sinks is similar to the rate at which new plants grow then the surface of the swamp will stay relatively stable and more vegetation can be added and form the bed on which successive generations of the plants can develop. If the rate of sinking was too slow then the layers of vegetation would not be covered by the water and would be more likely to oxidise and hence rot away ± preventing the formation of the peat, and hence coal. Alternatively, if the land sank at too fast a rate there would have been the danger that high tides or flash floods would either have washed some of the peat away, or introduced silt or sand and reduced the thickness of individual layers of coal. In some areas a cyclical rotation can be determined by geological investigation of coal deposits, indicating a mismatch between the rates at which the various processes were occurring ± considerably limiting coal seam thicknesses. In some instances such cyclical sequences have been found to be up to 3000 m in thickness. In the major basins of the United States, the Commonwealth of Independent States (CIS) and China this relative sinking occurred at optimal rates and some very thick seams were formed during the local coal ages. These ages did not take place at the same time in different parts of the world because of the local differences in geological and geographic conditions, although the need for long-term deposition means that much of the hard coal produced today comes from rocks

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Table 3.1 Spread of coal deposits through geological time AGE (million years before present)

System

Share of total coal reserves (%)

Area covered; in order of importance

0±65

Caenozoic

28.7

65±135

Cretaceous

16.7

135±200 200±240 240±280

Jurassic Triassic Permian

14.3 0.5 24.3

280±370

Carboniferous 15.6

Europe, Australia, New Zealand, North America, South America North America, South America, Europe, New Zealand Asia, Europe, Australia, North America Europe, North America Africa, Antarctica, Australia, Asia, Europe, North America, South America Europe, North America, Asia

Source: World Energy Conference. Survey of Energy Resources, 1980.

that were deposited some 240±370 million years ago. The time and geographical spread of coal deposits is shown in Table 3.1. Another example of how a coal basin can form can be seen from the south and central Sumatra coal basins in Indonesia. These basins are thought to have formed along the back-deeps or foreland basins along the Indonesian island arc, and are parallel to the subduction zone on the plate boundary running from south Java to south-west Sumatra. The basins are hinged to the larger land mass that previously existed to the north-east. The basins started to develop during the Oligocene/Miocene boundary, and during the Lower Miocene epoch deposits of a range of continental, fluvial, limnic, lagoonal and open marine phases were created. This included a range of volcanic sediments that formed from the volcanicity of the island arc to the south-west. During later phases of magmatic activity intrusions beneath the basin led to the generation of folds and, in some areas, this has increased the rank of the coal present in the area. The south Sumatra basin was able to produce a regular pattern of coal deposition because of the exceptionally regular subsidence coupled with the right type of climate. In terms of plate tectonics, this period probably coincides with a hiatus in the subduction process, which was recorded in the Upper Tertiary period and would extend to the Upper Pliocene and perhaps to the Middle Pliocene. This hiatus would have reduced volcanic activity and meant that the surrounding rocks would have sunk back as the magma cooled.

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Table 3.2 Coals produced in south Sumatra Content Total moisture Ash (dry basis) Sulphur (dry basis) CV net (in situ) Sodium in ash Grindability

23%±54% 3%±12% 0.2%±1.7% 10±20 MJ/kg 1.8%±8.0% 37±56 HGI

Source: PTBA.

In the areas close to volcanic activity the coal has increased in rank to the extent that some anthracite and bituminous coals have been formed with energy contents of up to 22MJ/kg (see Table 3.2). In other areas, such as in Sydney harbour, some coals adjacent to volcanic activity have been turned to cinder, completely destroying any economic value. As can be seen in Table 3.1, there is a wide spread of coal deposits around the world throughout a wide range of geological time. There are few if any deposits older than the 370 million years of the Carboniferous period because of the lack of spread of vegetation at this time. It is also the case that the older the rock the greater the possibility that geological processes will have affected the coal physically or chemically through faulting, tilting or alteration associated with the high temperatures and pressures of metamorphism. In the United States the Carboniferous period is split in two with the earlier and later but not strictly Lower and Upper periods represented by the Mississippian and the Pennsylvanian, respectively. Coal formation occurred in major swamps during the Carboniferous period when much of the continental crust was concentrated as Gondwanaland in the southern hemisphere. Eventually, after a period thought to be as much as 40 million years, the land level rose relative to the sea and the climate became drier. This led to an end of the conducive conditions for coal formation. In some instances these temperatures and pressures are beneficial and can upgrade the type, or rank, of coal from the basic peaty material that is initially formed, to the high grade and quality bituminous coals or anthracites that are used in the metallurgical industry or in domestic applications, respectively. However, if the coal is subjected to too much heat or pressure it may volatilise with the

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Table 3.3 The calorific value of different coal types Specific gravity

Carbon (%)

BTU/lb

0.85 1.04 1.15 1.30 1.50

60.83 67.43 72.92 83.48 95.35

3 000 6 500 ± 7 000 8 000 ± 10 000 10 000 ± 13 000 15 000

Peat Lignite Brown or sub-bituminous coal Bituminous coal Anthracite Sources: G L Kerr, 1919; Author.

carbon being absorbed into surrounding rocks or, as occurred with the formation of some of the gas fields in the North Sea, may combine with hydrogen to form natural gas. As a consequence the rank of a coal is largely dependent upon its age as this increases the probability that it will have experienced many of the geological processes inherent in the formation of high rank coal. The lowest grade lignite yields the lowest amount of contained energy per unit weight and is therefore of lowest value (see Table 3.3). Anthracite, which has been subjected to the highest grades of metamorphism, yields the highest amount of energy per unit weight, and is therefore of the highest value. Other factors, such as the amount of sulphur contained in the coal are of importance due to increasing environmental concerns and major producers are now publishing sulphur contents of their coals.

3.2 Coal classification Most coals are classified according to their carbon content and the specific amount of energy that they contain. The greater the amount of carbon, the higher the effective rank of the coal and the higher the average energy content of the material. Table 3.4 shows the coal classification of the American Society for the Testing of Materials (ASTM), which is widely accepted for determining the name of a coal, although other countries and organisations have their own nomenclature. This can be particularly confusing in the international arena as different producers may describe broadly similar coals very differently. Furthermore, the use of different measures for energy content is also particularly confusing. It will be noticed that coals of higher ranks are classed in terms of

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Table 3.4 The classification of different coal types Class

Group

Fixed carbon Volatile matter Calorific value (%) (%) (MJ/kg)

Anthracite

Meta-anthracite Anthracite Semi-anthracite

Bituminous

Low volatile bituminous Medium volatile bituminous High volatile A bituminous High volatile B bituminous High volatile C bituminous

98±100 92±98 86±92

0±2 2±8 8±14

78±86 69±78 31

>32.6 30.2±32.6 26.7±30.2

Sub-bituminous

Sub-bituminous A Sub-bituminous B Sub-bituminous C

24.4±26.7 22.1±24.4 19.3±22.1

Lignite

Lignite A Lignite B

14.7±19.3