Memorandum submitted by Miller Argent
1. PERSONAL INTRODUCTION
1.1 My name is James Thomas Poyner; I am
a director of a number of mining and associated companies within
The Miller Group Limited.
1.2 I am also a director of "Miller
Argent (South Wales) Limited" which is a Joint Venture Company
between: The Miller Group Limited, Argent Group plc and Mr Bernard
J Llewellyn. This company was specifically set up to carry out
the Ffos-y-fran Land Reclamation Scheme in Merthyr Tydfil, South
Wales. This scheme represents the largest authorised coal mining
reserve in South Wales.
1.3 I have specific responsibility for all
mining matters of The Miller Group Limited and together with my
co-directors I have responsibility for the management of Miller
Argent (South Wales) Limited.
1.4 I have over 40 years experience in the
Building, Civil Engineering and Opencast Coal Mining Industries.
My experience and expertise covers the planning, operation and
management of large-scale building, civil engineering, opencast
mining and land reclamation projects.
2. COMPANY INTRODUCTION
2.1 Miller Argent (South Wales) Limited,
(Miller Argent), is the General Partner company of the Ffos-y-fran
Limited Partnership and is owned by the following three companies:
2.1.1 The Miller Group Limited; the UK's
largest privately owned Housebuilding, Property Development and
Construction business. The Miller Group has over 60 years experience
in working large-scale land reclamation and opencast coal mining
projects in the UK and overseas. The mining division of the Miller
Group was the first company in the world to receive BSI Third
Party accreditation to BS 5750 for the design, management and
operation of opencast coal sites. The Miller Group has an annual
turnover in excess of £1.2 billion and has net assets in
excess of £250 million.
2.1.2 Argent Group PLC; a successful London
based Property Development Company with unrivalled expertise in
large-scale urban regeneration projects throughout the UK. Argent
Group PLC has net assets in excess of £140 million and is
a wholly owned subsidiary of British Telecom Pension Scheme, with
net assets in excess of £25 billion; and
2.1.3 Cwmbargoed Mining Limited, a privately
owned local company representing the interests of the Llewellyn
family who have been involved in coal mining in South Wales for
a hundred years.
2.2 The company Miller Argent has been specifically
set up to work the Ffos-y-fran Land Reclamation Scheme. The partners
of the company have been actively involved in this project since
the time of the privatisation of British Coal and have already
spent many millions of pounds in taking the project forward to
where it is today.
2.3 The Ffos-y-fran Land Reclamation Scheme
is in effect the finessing of the third phase of the East Merthyr
Land Reclamation Scheme, which has been promoted by the local
authority since its conception in 1983. The scheme provides for
the reclamation of over 1,000 acres of acutely derelict and unsafe
land. The reclamation scheme is paid for entirely by the recovery
of the underlying coal, which is to be extracted by opencast methods.
No monies will be used from the public purse.
2.4 Miller Argent (South Wales) Limited
has BS EN ISO 9001:2000 accreditation for the design, management
and operation of opencast mining sites.
3. SCOPE OF
3.1 I have been requested to give evidence
to the Welsh Affairs Select Committee on the subject of Energy
in Wales in general and Opencast Coal in particular and I am pleased
to have been given that opportunity.
3.2 The purpose of my evidence is to provide
the Welsh Affairs Select Committee, and other interested parties,
with a clear explanation of (i) the workings of the Opencast Coal
Industry, (ii) the methodologies employed, and (iii) the industry
view on the energy situation, in an attempt to assist in the general
understanding of the contribution the Industry has and continues
to make in terms of the UK plc's energy portfolio.
3.3 I have to stress from the outset that
although I am obviously pro coal I am not against other sources
of fuel from which electricity can be produced and industry can
be serviced. In fact I wholeheartedly support a balanced, mixed
3.4 I also do not deny the fact that global
warming and climate change is a reality and that mankind must
introduce new measures to combat the effects of the industrialised
3.5 However, I am concerned that there is
a great deal of misunderstanding in the public domain and that
there is a danger that decisions germane to the production of
electricity in the UK may be made that are not necessarily in
the best interests of the people of the UK.
3.6 Climate change and global warming are
linked and constitute a very complex and involved structure. It
is far too easy to blame the burning of fossil fuels and to concentrate
efforts on legislating against fossil fuels believing that that
will solve the problemit will not.
3.7 The prime reason for mankind's contribution
to climate change is attributable to POPULTION INCREASE and consequential
POVERTY. The world's population is expected to rise from the current
6.5 billion to 9.1 billion by 2050.
3.8 The population in the UK has broken
the 60 million barrier and is expected to rise to c 68 million
UK POPULATION (ESTIMATED)
Source: Office for National
3.9 "Global economic growth, the primary
driver of energy demand, is conservatively forecast to average
3.2% per annum between 2002 and 2030. Population growth will continue,
with the world population expected to reach over 8 billion by
2030, from its current level of 6.4 billion.
Fossil fuels will continue to dominate energy
consumptionaccounting for around 85% of the increase in
world primary energy demand over the next 30 years.
The forecast growth in demand will not alleviate
the major concerns around energy poverty. In 2000 only one in
six people worldwide had the access to energy required to provide
the high living standards enjoyed in the developed world. These
one billion people consumed over 50% of the world's energy supply,
while the one billion poorest used only 4%.
Energy is essential to poverty alleviation.
All fuel sources will be neededbut as the most abundant
and affordable of all the fossil fuels, the role of coal will
The world currently relies on coal for 40% of
its electricity and 66% of steel production is dependent on coal".
[World Coal Institute]
3.10 According to the International Energy
Agency (IEA), there are currently 1.6 billion people (25% of the
global population) without any access to electricity. The IEA
state that without global radical new policies, 1.4 billion people
will still lack access to electricity in 30 years time.
4. THE OPENCAST
4.1 Coal has been extracted by opencast
methods as far back as the bronze age and many records exist of
coal being recovered in early Roman times, when coal was extracted
where it outcropped on hill sides.
4.2 The UK Opencast Coal Industry was formalized
in 1942 when the then Ministry of Fuel and Power invited a select
group of Civil Engineering Contractors to recover coal by opencast
methods as a wartime expedient. In December 1942 responsibility
for opencast work carried out by civil engineering contractors
shifted to a newly formed Directorate of Opencast Coal Production
(DOCP) within the Ministry of Works and Planning, acting as
agent for the Ministry of Fuel and Power which purchased and disposed
of output. The industry in the UK has continued ever since, making
a very valuable and significant contribution to the UK economy.
4.3 The Coal Industry was nationalized in
1947 and the National Coal Board (NCB) was formed. The NCB was
split into two working sections: Deep Mines and Opencast. The
opencast was run by the NCB Opencast Executive.
4.4 A subtle and significant difference
between Deep Mines and Opencast is that the NCB never mined a
single ton of opencast coal themselves. The works were always
put out to tender and were always mined by the successful Contractor
to a site specific tender.
4.5 However the NCB, who later traded as
British Coal (1987), retained the skills and responsibility for:
(a) the national identification and assessment of coal reserves
including exploration; (b) land management and acquisition; (c)
planning applications; (d) project management of the extraction
contracts; and (e) the sale and distribution of the coal.
4.6 Coals recovered by opencast were often
blended with deep mined coal in order to improve the quality of
the deep mined coal. It is possible to recover coal by opencast
methods more cleanly than by deep mine methods.
4.7 Opencast coal schemes were often used
to bring about reclamation of brown field sites, often a legacy
of previous deep mine or industrial activity.
4.8 British Coal was privatized at the end
of 1994 and the industry became a number of smaller private entities.
The three successor companies to British Coal acted independently
and in fact in competition with each other. As a result the industry
no longer had a national strategy and became fragmented and of
reduced substance (in relative terms).
4.9 The successor companies to British Coal
no longer let out opencast coaling contracts to other contractors,
preferring to self mine. This has resulted in many firms exiting
the industry as contractors, with only a few of them branching
out into private opencast mining in their own right.
5. GRAPHS RELATING
5.1 Total tonnage of coal consumed in the
5.2 Graph showing relationship with UK deep
mined, opencast and imported coal:
5.3 Graph showing coal production in Wales:
5.4 Coal Production in the UK from 1700
6. THE ISSUES
UK OPENCAST COAL
6.1 In my opinion the issues facing the
UK are actually very straight forward and are set around the Government's
four long term goals:
6.1.1 to put the UK on a path to cut our
carbon dioxide emissions by some 60% by about 2050, with real
progress by 2020;
6.1.2 to maintain reliable energy supplies;
6.1.3 to promote competitive markets in the
UK and beyond, helping to raise the rate of sustainable economic
growth and to improve productivity; and
6.1.4 to ensure that every home is adequately
and affordably heated.
6.2 I unequivocally support all of the above
6.3 Whatever decisions are taken now by
Government with regard to future electricity generation they will
by necessity take time to deliver, eg it will take approximately
12 years to bring a nuclear power station into production from
the day it is decided to go ahead with a scheme. In many ways
there is valid criticism that the UK is far too late in addressing
its energy problems.
6.4 Therefore the second goal of Government"To
maintain reliable energy supplies" [ 5.1.2] is paramount.
This is made even more sensitive having in mind the absolute need
to replace the ageing fleet of our power stations and to provide
for the increase in demand for electricity.
6.5 Whether we like it or not, the UK relies
on coal for a third of its electricity, in fact over the winter
months it relies on coal for half its electricity. This reliance
will not change in the short to medium term.
6.6 "Coal is the fastest growing energy
source in the world, with coal use increasing by 25% for the three
year period ending in December 2004" [BP Statistical Energy
Review, June 2005]. Coal is the preferred source of fuel for the
generation of electricity throughout the world and its use is
set to further increase dramatically. More coal is being consumed
today than at any other time in history. Unless and until alternatives
are in place coal will continue to be used in the UK otherwise
the lights will go out and our economy will crash.
6.7 The decision Government has to make
is what proportion of the coal the UK consumes will be indigenous.
6.8 It is already too late to argue that
indigenous coal can provide our full needsregrettably it
cannot. However, the UK Coal Industry can make a significant contribution
to our needssomewhere between a third and a half of all
coals consumed could be supplied by the UK Coal Industry. It
simply does not make sense not to do so. If the UK Coal Industry
was allowed to die then all we would be doing would be to import
the coal from elsewhere in the world, which would result in exporting
both the jobs and the environmental problems. The carbon footprint
would be greater because by necessity we would be transporting
coal unnecessarily around the world. This would be in direct contradiction
to the statement included in "Minerals Policy Statement 1:
Planning and Minerals" as published in November 2006 by the
Department for Communities and Local Government, wherein at page
9, item 15, second bullet point, it states:
"aim to source mineral supplies indigenously,
to avoid exporting potential environmental damage, whilst recognising
the primary role that market conditions play;"
6.9 In the November/December 2006 issue
of "The MonitorBlue Skies Supplement", it is
"There are however, two fundamental impediments
that need to be addressed if the UK is to maintain its level of
indigenous coal production. The country needs a commercial regime
that attracts investment to access deep mine reserves, and an
urgent need to change the present planning regime that discriminates
against surface mining".
"The presumption against opencast mining,
contained within the guidance to planning authorities, has resulted
in a significant slump in consents for replacement sites and the
loss of outputs and jobs. As a consequence, coal imports have
soared, often from surface-mine production in countries with far
less exacting environmental constraints and health and safety
considerations than those imposed on UK producers".
"UK coal producers believe the annual production
of around 20 million tonnes of coal is sustainable for the foreseeable
future, and should become a cornerstone of the government's energy
I entirely agree with these statements.
6.10 "In 1996 it was estimated that
there was around one exagram (1 x 1015 kg or 1 trillion tonnes)
of total global coal reserves accessible using current mining
technology. ... In theory there is enough coal to last for 300
years ..." based on present day consumption.
6.11 It is assessed that there is still
190 billion tonnes of coal within the UK. Of that quantity approximately
1 billion tonnes is accessible and economically extractable based
on current prices and technology.
6.12 The UK cannot solve the world's problems
but it can show initiative and leadership by example. Globally
coal is here and is here to stay. The world's coal industries
and governments should work together to continue to improve coal's
environmental performance by ensuring that coal is produced and
used efficiently and that the technological advancements are fully
and vigorously pursued.
6.13 There are three essential core elements
common to all users of coal throughout the world:
6.13.1 Reduction of pollutant emissions such
as particulate matter and oxides of sulphur and nitrogen (SOx
and NOx) to near zero levels. This has largely been achieved and
is now "off the shelf technology".
6.13.2 Increasing thermal efficiency to reduce
CO2 and other emissions per unit of electricity generated.
Major gains have already been achieved and further potential can
6.13.3 Reducing CO2 emissions
to near zero levels. The development of near zero emission technologies
has commenced and is accelerating rapidly. The UK must play its
7. COAL IN
7.1 There are two coal fired power stations
in Wales: Uskmouth and Aberthaw. Combined they have the ability
to burn c 4 million tonnes of coal per year.
7.2 Aberthaw Power Station was specifically
built to burn Welsh Dry Steam Coal. It is the ONLY coal fired
power station in the UK designed to burn low to mid volatile coal.
There is ONLY the South Wales Coal Field in the UK that can supply
coal of the correct specification that can be burnt satisfactorily
without considerable blending at Aberthaw Power Station. Compliant
coal for Aberthaw power station is not readily available throughout
the world and currently RWE (the owners of Aberthaw Power Station)
obtain most of their imported coal for this power station from
Russia. Mr Putin has already made his intentions known with regard
to his aspirations for control of energy sources.
7.3 The South Wales Opencast Coal Industry
has the ability to supply up to 50% of South Wales's requirement
for coal for the foreseeable future, subject to planning.
7.4 The unanswered question is how much
coal there is remaining in South Wales. Coal is an asset of the
UK; it belongs to the country and it is regrettable that government
has not quantified, with some commercial accuracy, the amount
of coal that is economically viable and accessible.
7.5 In very general terms, based on current
pricing and current technology, it is estimated that there is
approximately 1 billion tonnes of economically viable and accessible
coal reserves remaining in the UK. Of that tonnage approximately
400 million tonnes is deep mine coal and 600 million tonne is
opencast. It is estimated that 20% of the potential for opencast
is to be found in South Wales.
7.6 In terms of my company's contribution,
the following graph details our anticipated coal production in
South Wales as at today's date.
7.7 The planning policy for coal recovery
in Wales is basically covered under the general Minerals Planning
Policy. There is no specific guidance for coal other than a DRAFT
Minerals Planning Policy Technical Advice Note on Coal that was
issued as a consultation document in January 2006. Miller Argent
(South Wales) Limited participated in that consultation process
and a copy of its response is attached to this document, as is
its response to the Energy Review consultation "Our Energy
7.8 The National Assembly has yet to issue
its findings on the Coal TAN despite enormous pressure from all
8. EUROPEAN COMMISSION
TECHNOLOGIES ... [NEWSBRIEF
ISSUE 8110 JANUARY
8.1 The European Commission wants to see
up to 12 large-scale demonstrations of sustainable fossil fuel
technologies in commercial power generation by member States by
8.2 In a communication issued in January
2007 as part of its Energy Policy for Europe, the EC said the
new policy would enable coal to maintain its important contribution
to "secure and competitive energy supplies for Europe".
8.3 The January 2007 policy communication
states: "Coal and gas account for over 50% of the EU's electricity
supply and will remain an important part of our energy mix. If
the EU is to achieve its long term climate change objectives,
much cleaner coal technologies and a significant reduction of
CO2 emission will be necessary. Furthermore, developing
clean coal and carbon capture and storage technologies is crucial
at the international level; it is expected that twice as much
electricity as today will be produced world-wide from coal by
2030. This will in turn bring new opportunities for European export
8.4 "In order to make sustainable fossil
fuels a reality after 2020, the EU must establish a favourable
regulatory framework for the development of these novel technologies,
invest more, and more efficiently, into research, as well as take
international action. The EU Emission Trading Scheme will also
need to incorporate capture and storage in the future".
8.5 The communication states that in 2007,
the Commission will start work to:
8.5.1 design a mechanism to stimulate the
construction and operation by 2015 of up to 12 large-scale demonstrations
of sustainable fossil fuel technologies in commercial power generation
in the EU; and
8.5.2 provide a clear perspective when coal
and gas fired power plants will need to install CO2
capture and storage. Today, the Commission believes that by 2020
all new coal-fired plants should include CO2 capture
and storage technologies and existing plants should then progressively
follow the same approach.
8.6 Adds the statement: "Fossil fuels
represent an important element of the energy mix of the European
Union as well as in many other economies. Coal is traditionally
the key fossil fuel in power generation and by far the most carbon-intensive
one. Coal can contribute to the security of energy supply and
the economy of the EU and the world only with technologies allowing
for a drastic reduction of its harmful environmental effects."
8.7 "Clean Coal technologies, which
increase efficiency and reduce polluting emissions, are widely
used in the power generation sector of the most advanced countries
today. Further progress towards novel technological solutions,
which also incorporate the concepts of CO2 capture
and storage in coal-based power generation, is anticipated by
2020 so that after 2020, `near zero emission' power generation
can be systematically used in the EU and in the world".
8.8 It is essential that the UK plays it
part in this initiative.
9. THE ISSUES
UK ENERGY INDUSTRY
9.1 The biggest problem the UK Energy Industry
faces is that much of its electricity generating capacity is too
old or is ageing fast. In very broad terms we have a generation
capacity of c. 74 GW, of which:
9.1.1 23GW is coal fired.
9.1.3 5GW is mixed or dual fired.
9.1.5 1GW is gas turbines and oil engines.
9.1.7 4GW is Hydro and other renewables.
9.2 Over the next decade virtually all of
the nuclear stations will be phased out, as will a number of the
coal fired stations, either by age or by ability to meet new legislation.
9.3 The demand for electricity is set to
rise year on year.
9.4 Plant margin (an excess of potential
generating capacity over maximum demand) is crucial to the security
of electricity supply, as generating units are not available 100%
of the time due to breakdowns and the need for maintenance and
repair. It is generally agreed that a minimum plant margin of
15% should be in place over the peak demand during the winter
months in order to maintain a secure supply of electricity.
9.5 Security of supply of fuel source is
now also a major parameter in determining the flavour of future
generation plants. Diversification has got to be the order of
the day and the three major reliable, proven, means of power generation
are: gas; coal; and nuclear.
9.6 It appears now to be accepted that it
would be folly to rely on gas for 80% of our future generation
capacity (as was suggested earlier by Government). Given all the
circumstances a dependence on gas would leave the UK vulnerable
to interruptions to supply caused by: (a) political, (b) terrorist
action, and/or (c) market dislocating price shocks.
9.7 Too much dependence on nuclear would
present an unacceptable terrorist target and also exacerbate the
so far unanswered problem of treatment and disposal of nuclear
9.8 The technology does not exist to promote
"Renewables" as being a major contributor. This does
not mean to say that research and development should not be accelerated,
but there is nothing currently out there that can be relied upon
as a true alternative to what already exists.
9.9 Hydro and biomass co-firing make a worthwhile,
but nevertheless small, contribution to the renewable element
of the UK's total capability to generate electricity.
9.10 In environmental terms coal is now
burnt in a way which reduces its acid rain potential to minimal
levels, whilst the retrofitting of clean coal technologies to
existing coal fired plant and the development of Carbon Capture
and Sequestration (CCS) strategies can make coal increasingly
Kyoto friendly. Coal is competitive on price, it is readily available
from at least 70 different countries in the world (a wide variety
of politically stable countries), there is a ready indigenous
supply, it is easy and safe to transport, store and use.
9.11 Indigenous coal can provide the electricity
needed for all our emergency services, hospitals, government etc.
in times of a national emergency without the reliance on any other
country, should such a situation ever exist.
10.1 In accordance with Government policy
following the Aberfan disaster, local authorities were required
to undertake surveys of derelict land within their areas and adopt
programmes for the progressive reclamation of the identified derelict
and/or unsafe land.
10.2 The former Merthyr Tydfil County Borough
Council joined with 11 other local authorities under the auspices
of the Monmouthshire Derelict Land Reclamation Joint Committee.
10.3 The committee identified a substantial
area of derelict land that subsequently formed part of Phase III
of the East Merthyr Land Reclamation Scheme (EMRS).
10.4 The Ffos-y-fran Land Reclamation Scheme
encompasses the third Phase of the East Merthyr Land Reclamation
Scheme. The essence of the Scheme is to reclaim approximately
400.6 hectares of land, 317 hectares of which are classed as derelict
land (with inherent dangers) and to restore it to safe and beneficial
use. The financial means and process of achieving this reclamation
is by the incorporation of the extraction of the underlying strategic
coal reserve by opencast methods.
10.5 The Ffos-y-fran Land Reclamation Scheme
is the largest authorised coal reserve in South Wales. The scheme
has been delayed by legal challenges which have cost many millions
of pounds. Not only has the developer been subjected to excessive
and unforeseen costs but so have the authorities who have had
to defend their position and also the tax payer by way of publicly
funded legal aid given to the objectors.
10.6 The scheme will provide direct employment
for 200 people and will secure the employment for approximately
a further 400 people in support occupations. Skills training will
be available to all employees wishing to advance themselves. These
are extremely important factors as Merthyr Tydfil has the highest
rate of unemployment in the UK.
10.7 Over £80 million (at today's value)
will be paid out in wages to those directly employed and statistically
every pound earned in a community is spent and spent again many
times within that community.
11.1 Land reclamation and opencast coal
mining sites can be dangerous places to work and visit, particularly
to the uninitiated. Therefore safety is of paramount importance
specifically for the people employed and the general public affected
by the operations.
11.2 The working areas are fenced to discourage
trespass and warning signs are posted and maintained at regular
intervals around the site boundary.
11.3 All employees undergo an induction
course which addresses safety and environmental issues as well
as company procedures. Safety awareness courses are held every
year for the entire workforce and toolbox talks are given at more
11.4 Risk assessments are carried out on
all site operations and are effectively communicated to all those
involved. All drivers are individually tested before being authorised
to drive any item of plant on site. Site licences are issued authorising
drivers to operate the items of plant for which they have been
11.5 Each operating company has: (i) a Safety
Management Procedures Manual, (ii) a Plant Procedures Manual,
and (iii) a General Management Procedures Manual, all of which
will be effectively communicated, implemented, audited and controlled.
11.6 Under the Quarries Regulations 1999
it is the duty of the operator to be able to demonstrate that
sufficient competent persons are employed to operate the opencast
site and that everyone who works at the site is competent to do
the job they do, unless it is someone undergoing training and
under the direct supervision and control of a competent person.
11.7 The philosophy of continuous improvement
and lifelong learning is encouraged within the industry and every
opportunity is given to those employees wishing to develop new
skills and advance themselves in the workplace.
11.8 There is considerable legislation governing
the works to be carried out on site including but not limited
to: Health and Safety at Work Act 1974, Regulations Made Under
HSWA and Supply of Machinery Regulations, Management of Health
and Safety at Work (MHSW) Regulations 1999,Provision and Use of
Work Equipment Regulations 1998, Workplace (Health, Safety and
Welfare) Regulations 1992, Manual Handling Operations Regulations
1992, Personal Protective Equipment at Work Regulations 1992,
Health and Safety (Display Screen Equipment) Regulations 1992,
The Supply of Machinery (Safety) Regulations 1992, Control of
Substances Hazardous to Health (COSHH) Regulations 1999, Quarries
Regulations 1999, The Noise at Work Regulations 1989, The Electricity
at Work Regulations 1989, Confined Spaces regulations 1997, Borehole
Sites and Operations Regulations 1995, Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR),
The Health and Safety (First Aid) Regulations 1981, The Health
and Safety (Safety Signs and Signals) Regulations 1996, Safety
Representatives and Safety Committees Regulations 1977, Construction
(Design and Management) Regulations 1994, The Ammonium Nitrate
Mixtures Exemption Order 1967, Pressure Systems Safety Regulations
2000, The Control of Explosives Regulations 1991 etc.
11.9 The UK Opencast Coal Industry has a
proven track record of high health and safety standards.
James T Poyner
23 January 2007