The year so far has seen mixed fortunes for mining projects under development in the UK and demonstrates a divide between investors and politicians.
Firstly, let’s head down to Cornwall.
It is normal when talking about mining in Cornwall to illustrate the subject with a picture of actor Aiden Turner in his role as Ross Poldark, standing in a field with his shirt off scything his crops, or a photo of Jeremy Wrathall of Cornish Lithium. It is a shame we do not have a picture of Jeremy Wrathall in a field with his shirt off, but you never know it may happen!
Cornish Lithium has, so far, been a stunning success in raising funds. In mid-October last year, the group raised GBP3.8m in a crowdfunding campaign after having initially gone to the market seeking GBP1.5m.
This oversubscription from retail investors could be put down to excitement around battery metals. But the frankly brilliant job Jeremy and his team have done in marketing the project and – more critically delivering on their milestones – is the more likely reason.
He also has a lot of interest from the various UK Government agencies, such as the Faraday Institute, which is looking towards critical metal supply to grow our BEV industry.
However, it’s not just battery metals that are sparking interest from investors.
Another group, Cornish Metals, successfully listed on the AIM market on 15 February 2021. Again, the funding was oversubscribed, with broker SP Angel raising GBP8m from retail investors and a small number of institutions.
If anything, CEO Richard Williams is more of a latter-day Ross Poldark than Jeremy Wrathall, as Cornish Metals have licences at United Downs and South Crofty to cover hard rock materials including copper, which Poldark was mining, and tin.
Cornish Lithium is granted a concession on these areas to look for lithium in hot spring brines, for which Cornish Metals have a free carried interest and royalty agreement.
It would seem retail investors are keen to support these projects even after many lost heavily on Sirius Minerals after they failed to secure the last tranche of debt finance to proceed with construction of the Woodsmith Polyhalite mine in North Yorkshire. Anglo American, however, was more than happy to proceed with the project but bought it for pennies in the pound.
However, at the same time as Cornish Metals was putting its listing to bed, UK mining had a setback with the decision by Cumbria County Council to return the planning application for West Cumbria Mining‘s Woodhouse Colliery for the fourth time.
The coking coal project had been approved by the County Council on three separate occasions, most recently in October 2020. The Secretary of State twice rejected calls for the decision to be overturned.
But you could see the bad news coming in the days beforehand as climate change experts like Greta Thunberg and Edward Miliband weighed into the issue. Boris Johnson’s government has been accused of being hypocritical about their carbon neutral targets ahead of the COP26 Climate Change Summit while simultaneously supporting a new coal mine.
It’s not difficult to see why. West Cumbria Mining is talking about a GBP650m investment that will create 500 new jobs. It fits in perfectly with all the government ambitions of ‘levelling up’ and the Northern Powerhouse. It is located outside of Whitehaven, a down-at-heel town with above-average unemployment. Indeed, the town was built as a coal export terminal for shipment to Ireland in the 1850s. Since the last colliery closed in the 1980s, the only major employer close to the town is Sellafield Nuclear Power Station.
The clincher on Climate Change, though, is that the coal is metallurgical – also known as coking – not thermal coal. It will not be burned in a power station; it is for use in the steel industry. As all of Europe’s coking coal is imported from the USA, Australia and Russia, there would be an enormous carbon saving in not transporting it across the world.
What is more, it would make British steelmaking more competitive, and the surplus coal would be exported to Europe from Teesside.
Another tick in the box for the economy.
One day steel mills will probably be powered by hydrogen. But the technology to do that is not fully developed, and it will be expensive to retrofit our existing mills. Will the UK’s or Europe’s remaining steel industry survive long enough to benefit from such investment?
One thing for sure is that all the wind turbines we are building for the North Sea will need a lot of steel. And while some may wish to criticise the government for supporting West Cumbria Mining, the government has also been criticised for ‘offshoring’ our carbon footprint.
The strides we have made in terms of a shift to renewables and the ambitions we have set ourselves for carbon neutrality are breath-taking. We will certainly never build a new coal-fired power station in the UK, while China currently has 227 new ones under construction.
But we leave ourselves vulnerable to accusations of hypocrisy if we continue to import energy and allow the new technologies to be developed overseas.
Image (c) Shutterstock | Michelle Wade