Australian investor behind coal mine plan
A PLAN to open a new coal mine in Cumbria is being funded by an Australian private equity firm using US finance.
EMR Capital has invested £14.7m for a 70% stake in West Cumbria Mining which wants to extract coking coal from a new mine close to the former Haig Colliery in Whitehaven which closed in 1986.
It expects to take on 500 staff if the mine opens in 2018 to supply the steel-making industry.
West Cumbria Mining’s chief executive Mark Kirkbride said the investment has been made from a $400m fund raised in the US by EMR which specialises in mining investments.
Mr Kirkbride said West Cumbria was previously a subsidiary of Riverside Energy which attracted seed funding from 50 Australian investors to explore the potential for extracting gas from coal in Whitehaven.
It was discovered the coal was good enough to extract so the plan changed, but the investors are still on board, holding the remaining 30% of shares with management.
West Cumbria believes there are more than 750 million tonnes of coking coal across an area of some 200 square kilometres. The company wants to extract two to three million tonnes a year to supply the steel industry which as an annual demand of four million tonnes in the UK and 40 million across Europe.
Mr Kirkbride said: “The UK is currently a substantial net importer of coking coal for industrial use, the majority of which is sourced from Australia and the USA. It therefore makes economic sense to source available coking coal on our own shores if sufficient amounts can be accessed and mined economically. Europe is also a major net importer of coking coal which provides another attractive market on the project’s doorstep.
“Coking coal is sold for around $120/tonne compared to thermal coal, which is used in power stations, which costs around $70. It does make it economically viable and certainly in the last decade the UK has become a very attractive place to build a new mine because of wage levels compared to somewhere like Australia.”
