Memorandum submitted by the Transport and General Workers Union (TGWU)

The Transport and General Workers Union has negotiating rights in the opencast industry within the UK and works closely with "Coalpro", the employers association, and its affiliates. In Wales, the major opencast coal producer is Celtic Energy and the T&G has enjoyed a good relationship with the company over recent years. We have given evidence at Public Inquiries in support of planning applications submitted by Celtic Energy (East Pit extension) and Miller Argent (Ffos-y-Fran Land Reclamation Scheme).

This union supports the view that "energy" is vital to a modern economy and that it must not be thought of as a short term domestic issue. The key to electricity generation in the UK is a secure, diverse and sustainable energy policy, which is not over reliant on any one fuel.

South Wales currently has to import power from England and consequently has one of the highest electricity prices in the UK. This has serious implications for the Welsh economy. The American multi-national company Alcoa, has cited high energy costs as a major factor in its decision to close its Swansea factory with the resultant loss of 300 jobs.

Aberthaw Power Station generates approximately 43% of the electricity for South Wales and in line with the nation's attempt to reduce CO2 and SO2 emissions, is building an FGD plant which will enable it to meet the Government's emissions targets for the foreseeable future.

Approximately, 50% of the coal burnt at Aberthaw is imported. However, it was designed specifically to burn Welsh Dry Steam Coal, and because the installation of the FGD plant will also increase the loading of the power station it becomes more vital, therefore to maintain future supplies of Welsh indigenous coal.

Coal supplied from the Welsh coalfields offers security of supply and security against the volatility of freight rates and exchange rates and a reliance on limited port capacity. Wales has millions of tonnes of coal reserves that could be extracted by opencast methods at costs which are substantially below international coal prices. Currently the predominant operator in South Wales is Celtic Energy which directly employs 275 workers across three sites and a distribution centre. Consent has finally been given to Miller Argent, the developer of the Ffos-y-Fran Land Reclamation Scheme which has the potential to employ 200 direct workers, and up to 400 indirectly. Ffos-y-Fran will produce the Dry Steam Coal that is the ideal fuel for Aberthaw Power Station. The coal will be transported to the Power Station via an existing rail link, thereby eliminating the need to transport by road. It must be remembered that the ratio of workers employed indirectly as a result of opencast is a factor of up to two times the number employed directly. This ratio is consistent with other opencast operations in the UK.

The valleys of South Wales are amongst the poorest and most disadvantaged regions in the UK and Europe more widely. The root cause is the cumulative impact of job losses from coal and other traditional industries. Industrial decline has been especially severe since the 1960's, culminating in the virtual disappearance of coal mining and metal manufacturing from the valleys during the 1990's.

Today the valleys are characterised by high levels of unemployment and economic inactivity. Many of the jobs which are available are poorly rewarded and relatively insecure.

Opencast mining gives an opportunity to provide relatively well paid, secure employment in areas which desperately need it.

Modern opencast sites in the UK are subject, quite rightly, to strict conditions and criteria set out by the relevant authorities. This union welcomes that intervention as it ensures the developers' accountability to the communities and to the public scrutiny which inevitably follows the industry.

As you would expect from an organisation such as the TGWU, our main concern is for the health and safety of our members and the communities in which they live and work. The public perception of opencast is that it is nearly always associated with respiratory illnesses and disease. In the seven years of my association with the industry, I have not encountered a single opencast worker that has suffered such a respiratory illness as a result of working in an opencast mine.

We acknowledge, however, that all workplaces, including opencast sites, have potential risks to workers. This union's commitment to health and safety, together with responsible employers and the technological advances made by the industry, will ensure that those risks are kept to a minimum.

The greatest impediment to opencast coal production is undoubtedly the difficulty in obtaining planning permission. Planning guidelines in England apply a presumption against approval for surface coal extraction unless strict conditions are met. No such presumption applies to any other form of development and specifically to any other mineral extraction. It is illogical, discriminatory and absurd given declining UK energy production. Again, extending buffer zones from the 200 metres that apply to some other minerals will sterilise large areas of reserves and could make operations unviable. Excessive fixed buffer zones are not supported by any objective criteria and discriminate against coal production.

Surface coal production is being strangled by the ratcheting up of requirements across the developed administrations and amongst mineral planning authorities. This is totally irresponsible against a background of restricted and expensive energy supplies. We would urge the Government to remove the presumption against, to ensure that mineral planning authorities properly apply planning guidance and to ensure, on energy policy grounds, that a similar regime applies throughout the UK.

Surface mines are also subject to Government imposed cost pressures that do not apply to the UK's international competitors. Increases in the duty on off-road diesel have increased costs significantly. When considered in conjunction with the climate change levy, this amounts to double taxation. Gas oil used for electricity is exempt for this reason. The Government should apply a similar exemption for diesel used in the production of coal, virtually all of which is used for electricity generation.

To summarise, the TGWU would propose the following:

• the presumption against opencast mining that applies in England and Scotland is illogical and discriminatory. It should be removed and certainly not introduced in Wales;

• replace fixed buffer zones in planning guidance by ones which are objectively assessed on site specific criteria for each application;

• the need for coal should be taken into account as a material consideration in planning applications;

• exempt opencast coal mining operations from duty on red diesel.

Everything must be done to ensure the safe extraction of indigenous reserves and to minimise the amount of imported coal used in electricity generation. Imported coal means exported jobs. Approximately 50% of the UK's coal supply is imported from countries such as Colombia and China, when it is estimated that approximately 220 million tonnes of coal reserves exist in the UK.

The human cost of imported coal is sometimes incalculable. In China for example, hundreds of thousands of miners start work everyday. By nightfall, on an average day, 14 of them will be dead. Foreign coal is subsidised by unsafe working practices and a disregard for the workers' wellbeing.

The Welsh Assembly Government agrees that there is a long term future for coal.

"Welsh indigenous coal is not only crucial for the continued secure supply of electricity to Wales as part of a balanced energy mix, but is also a major employer and key contributor to the economy".

January 2007