Project – TargetThis profile is a priority campaign target
Julia Hovenier, Banks and steel campaigner
Project – TargetThis profile is a priority campaign target
Julia Hovenier, Banks and steel campaigner
Why this profile?
The West Cumbria mine would be the UK's first new underground coal mine in 30 years. It was approved for construction shortly after the International Energy Association (IEA) stated that no new coal mines can be built if we are to remain within the 1.5°C limit. If built, it will generate 67 million tonnes of coal for steelmaking, and approximately 200 million tonnes of CO2 between now and 2049. Ecological concerns have also been raised, with doubts that the promised restoration after operations would be delivered, as is frequently the case in the UK. In addition, it will likely become a stranded asset, putting the long-term employment prospects of local residents in jeopardy.
What must happen
Given the massive climate impact and poor economic prospects of this mine, banks should not give project financing directly to West Cumbria Mining Ltd, nor should they finance the project through the capital market by investing in an EMR Capital fund. Banks should abstain from providing financial products of any kind to West Cumbria Mining Ltd.
|Sectors||Coal Mining , Iron and Steel Manufacturing|
The West Cumbria Coal Mine (Or Woodhouse Colliery Mine) is a metallurgical coal mine that was approved for development by the UK government in 2022. If constructed, the mine will produce 67 million tonnes of coal for steelmaking until the end of its lifetime in 2049. The exact buyers have not been disclosed, however it is estimated that some 80% of the coal is destined for steel plants in Europe, despite the mine being proposed as a domestic supply for UK steelmakers. The mining operations alone are estimated to emit a total of 2 million tonnes of CO2 and 340,000 tonnes of methane - actually using the coal mined will generate many times this. The parent company, West Cumbria Mining ltd, is 80% owned by Cayman Islands-based private equity firm EMR Capital. Approval of the mine has generated criticism from local, national, and international actors, on the grounds that the mine is not in line with the UK's climate commitments, and will further push global temperatures past the 1.5°C limit.
Impact on human rights and communities
Promising jobs with no future West Cumbria Mining (WCM) has stated that the mine will create 500 local jobs on site, and aims to fill 80% of them with local residents. However researchers have found that the mine is highly likely to become a stranded asset, as the market for its coal is declining before the mine even opens, meaning it will not be profitable enough. In which case it will not deliver on its promise of training a local workforce, and providing them with high-paying long term employment.
WCM states they plan to sell the coal to EU and UK steelmakers, however the UK and EU are rapidly phasing out coal-based steel production, and the high sulphur content of WCM’s coal makes it unmarketable to UK and EU steelmakers. Training workers to be skilled in a dying industry can not bring the high-paying resilient employment WCM promises. It is especially irresponsible when there is a far better long-term economic outlook for employment in low-carbon industries like renewable energy, retrofitting housing, public transportation, and recycling in the region, which could create up to 9000 jobs. Friends of the Earth have calculated that a programme to insulate homes in the area, cutting both carbon emissions and energy bills, could create as many jobs as the mine.
Impact on climate
Colossal carbon dioxide emissions will be emitted if the mine gets built. An independent consultant estimated that the mine will emit 2 million tonnes of CO2 between now and 2049. This number only includes CO2 emissions from the mine operations itself, and does not include emissions from burning the extracted coal which will be around 200 million tonnes according to Coal Action Network. There are also fresh concerns that the mining company significantly under-stated the methane release from the coal mine, a powerful climate change gas. These are emissions that the UK carbon budget cannot afford, if remaining within 1.5°C limits. The chairman of the Climate Change Committee Lord Deben stated that the coal mine is “absolutely indefensible” in the context of the UKs legally agreed climate commitments.
“Net zero” strategies are limited in scope and unfounded. West Cumbria Mining has stated that they will build and operate the world’s first ‘net-zero’ underground coal mine. They do not include emissions from burning the extracted coal in this commitment. Their strategy for net-zero includes carbon offsetting through an agency called Gold Standard. The chief executive of Gold Standard, Maragaret Kim, stated that using their reforestation and renewable energy-based carbon credits to offset a coal mine was “nonsense”, as any new extraction of fossil fuels is unjustifiable, and cannot be offset.
Major and unnecessary emissions would be released from burning the coal produced at the mine, which is destined for steel making. Steelmaking currently accounts for 11% of global CO2 emissions, in part because the most common steel making technique today requires burning coal to reduce iron ore. However, technological improvements coupled with increased demand for green steel is triggering a rapid transition away from coal-based steel production. The mine is predicted to sell 64 million tonnes of coal between now and 2049 to burn in the steelmaking process. Coal Action Network calculated that this could emit 200 million tonnes between now and 2049, which is equivalent to the United Arab Emirates' total 2021 emissions. With low-carbon alternatives available, there’s no justification for continuing to lock the world into coal-based steel.
Significant methane emissions from the mine could jeopardise the UK’s methane pledge, and dramatically accelerate global warming. A report by Ember found that WCM underestimated their potential methane emissions by 3.5x, and that their claimed ability to mitigate methane emissions by 95% are technologically unfounded. With current technologies, at most they can reduce it by 69%. Ember estimates that the mine could add almost 40% to the UK’s fossil production methane emissions by 2030. When the UK signed the global methane pledge in 2021, they committed to reducing methane emissions by 30% by 2030. The West Cumbria mine puts the UK at a high risk of exceeding their agreed methane limits.
Impact on nature and environment
Biodiversity loss would result from the construction and operation of the mine. Even with future conservation and restoration plans proposed by West Cumbria Mining (WCM), an independent ecological consultant estimated that there would be a net loss of 8.88% biodiversity in the region. There is also a worrying trend in the UK of underdelivering on restoration programs after the lifetime of mines.
Potential destruction of an ancient woodland ecosystem. The development plans of the West Cumbria coal mine include plans to build a conveyor belt to a rail loading facility. While one option would tunnel under the woodlands, another option is to use a “cut-and-cover” method, which would result in the clearing of ancient woodlands. While the full ecological impact has not been assessed, the clearing of ancient trees will have a negative impact on the soil and biodiversity of the woodlands. Bat and bird populations in particular would be under threat from the operations of the mine.
In June 2014, EMR Capital acquired 81% of West Cumbria Mining for GBP 14.70 million, gaining control of the company, and becoming the majority owner of the West Cumbria coal mine. In 2018 BNP Paribas, Societe Generale, and HSBC provided EMR Capital with USD 160 million in financing, through a loan and a revolving credit facility. By financing EMR Capital, banks are de facto providing EMR Capital with the money to further develop the mine
According to West Cumbria Mining ltd 2021 accounts, EMR Capital has invested at least £24 million in licence fees and exploration costs to date, and West Cumbria Mining ltd is currently looking to raise finance for the construction of the mine through an unknown financial advisor.
New Cumbria coalmine likely to break UK’s climate pledge, analysis says
UK’s first new coalmine for 30 years gets go-ahead in Cumbria
Green steel and Cumbrian coal
2023-05-16 00:00:00 | West Cumbria Mining confirms construction finance
West Cumbria Mining ltd releases a statement confirming that it has raised a "new multimillion pound funding package" which will cover construction costs of the mine through 2024.
2023-01-13 00:00:00 | Legal challenge launched against UK government's approval of the mine
Friends of the Earth and South Lakes Action on Climate Change launch a legal challenge to the UK government's decision to approve the application.
2022-12-07 00:00:00 | UK Government approves the application for the mine
After three delays over several months, UK Secretary of State for Levelling Up, Housing and Communities Michael Gove approves the application. The decision is widely criticised, including by the government’s official advisors, the Climate Change Committee.
2022-11-01 00:00:00 | Climate czar of UK warns against mine
Alok Sharma, COP 26 President and UK government climate czar, warns that the mine would be bad for the climate and jobs
2022-07-27 00:00:00 | ClientEarth sends legal warning to EMR Capital
ClientEarth sends a letter to EMR Capital, warning that they are opening themselves up to legal risk by financing the project, as they’re at risk of “breaching the duties it owes to investors in the fund”.
2021-09-13 00:00:00 | Planning inquiry begins
Planning inquiry held, run by a Government-appointed inspector. The main objectors are Friends of the Earth England, Wales & Northern Ireland (FOE) and South Lakes Action on Climate Change (SLACC). Cumbria County Council reverses its previous support and remains neutral.
2021-03-01 00:00:00 | Application goes back under consideration
Then Communities Secretary Robert Jenrick, “calls in” the application, meaning final approval will lay with the UK government rather than Cumbria County Council.
2021-02-01 00:00:00 | Protests over application approval
Over 80 Civil Society groups, climate scientists, and Lord Deben, chairman of the Climate Change Committee, make public appeals to the then Prime Minister Boris Johnson and Cumbria County Council opposing the mine. Cumbria County Council announced it will reconsider its decision on the application “in light of new information contained in the CCC’s December report”
2020-12-11 00:00:00 | UK national Climate Change Committee makes statement on steel and coal
The UK national Climate Change Committee releases a report stating that steel manufacturers must phase out coal rapidly in the coming decade in order to achieve the UK’s legal target of net zero by 2030.
2020-10-01 00:00:00 | Cumbria County Council approves the application
2017-05-01 00:00:00 | Coal mine application submitted
West Cumbria Mining submits an application for a new deep coal mine, with a lifetime of 50 years. In the application, they state the mine will extract 2.78 million tonnes of coal for steelmaking, with 85 per cent exported to Europe; and create 500 jobs in the community, and 2,000 more in the supply chain. They estimate the total cost of the mine to be £240m.
2014-06-10 00:00:00 | EMR Capital acquires West Cumbria Mining
Cayman Island-based private equity firm EMR Capital acquires 81% of West Cumbria Mining ltd. for £14.7 million, for the development of its Whitehaven Coking Coal Project. West Cumbria Mining Ltd announces its intention to explore the coast off Whitehaven for premium coking coal.