From West Cumbria to London, opposition to the controversial proposal for an underground coking coal mine, sited near Whitehaven, is widespread and growing. On 7th September, the day the public inquiry investigating the proposal by West Cumbria Mining Ltd started, members of the public gather in two locations to demand a greener future, in which a new coal mine has no place.
West Cumbria Mining Ltd want to extract 2.78 million tonnes of coking coal annually that would emit around 8.4 million tonnes of CO2 each year until 2049. Cumbria County Council approved the application, but in March 2021, the government decided it will be the final arbitrator. This was the result of requests from many quarters, including over 113,999 people supporting Coal Action Network's demand the government call in the decision.
A flock of canaries descended on the Ministry of Housing, Communities, and Local Government in central London, with messages to the Robert Jenrick from members of the public. Around 70 members of the public gathered in total split between with the canaries at the Ministry and those at the proposed mine site near Whitehaven, Cumbria.
Underground coal miners used to take canaries in cages into the mines. The birds would weaken and die when exposed to lethal gasses released by mining, acting as an early detection to protect the miners working deep underground.
Jill Perry from West Cumbria, who attended the Cumbrian rally spoke via phone and megaphone to the concerned people gathered in London. She said, “The steel industry is very carbon-intensive but is making fast strides in weaning itself off coking coal and onto green hydrogen so we don't need this new coal mine, we need to encourage the British steel industry to solidify its future by going green, and Whitehaven to provide a more certain future for its residents by going for green jobs.”
The whole flock outside the Ministry of Housing, Communities, and Local Government to sounded the alarm about the damage approving this new coal mine proposal would do to limiting climate change. Many people are concerned what a new coal mine would do to the UK’s reputation in climate leadership, the government’s net-zero commitment, investment in jobs of limited future prospects, and to steel decarbonisation momentum.
Coal Action Network has commissioned research revealing massive debts of over £29million, Cayman Islands tax havens, corporate structures that undermine responsibility, and taxes that may not get paid.
If West Cumbria Mining Ltd gain planning permission for the coal mine, the local council will apply ‘section 106 conditions’ that’ll mandate its responsibilities such as remediating the environment at the end of mining. Legally, West Cumbria Mining Ltd. will need to fulfil these conditions (though they’re often ignored) as well as other responsibilities such as compensation if things go wrong – but it doesn’t have its own money to do that, as it’s financially dependent on EMR Capital. If these liabilities add up to more than the likely profit, EMR Capital could just asset-strip what little West Cumbria Mining Ltd owns, and walk away, leaving taxpayers in the UK to clean up the mess. A similar event happened with Margam opencast coal mine in 2010.
A private equity fund that specialises in investments within the mining sector. EMR Capital Resources Fund 1, LP. and EMR Capital Investment (No.3B) Pte. Ltd have offices in the Cayman Islands tax haven, Singapore, Hong Kong, and Australia. The company typically invests in a mine for 3-5 years, then sells it onto another private equity fund at a profit.
Selling a company at a profit is often done by cutting costs so the company is more profitable, at least in the short-term. Costs can be reduced by cutting employees (which happened recently), benefits, and operating standards such as environmental protection. The location of the company’s offices mean it has little accountability to the UK government, or us, if things go wrong such as people are injured or the environment requires remediation.
EMR Capital Investment has loaned West Cumbria Mining Ltd at least £29 MILLION so far. The interest on a portion of this loan rose to 15% in 2020. As of 2020, West Cumbria Mining (Holdings) Ltd owed £947,545 in interest alone. West Cumbria Mining Ltd’s 2020 annual financial report documents that the company’s viability is dependent on EMR Capital’s financial support.
This means that West Cumbria Mining Ltd is vulnerable to bankruptcy if EMR Capital Investment pull out, which it has reportedly started to consider. That could mean that the mine is started, causing a huge amount of local environmental damage, but not completed, with the taxpayer having to fix the environment to the extent it can afford to.
West Cumbria Mining (Holdings) Ltd is operating over £12million in losses that’ll be offset against any future trading profit. Together with repaying its loan of £29 million to EMR Capital Investment and huge start-up costs, the amount that West Cumbria Mining pays in UK tax will be minimal for a long time.
A company profits from the natural resources and infrastructure owned and funded by us. This costs us in damage to the environment, infrastructure, and loss of natural resources. A key part of why companies are permitted to do this, is because we receive a proportion of that profit back in tax - more than it costs us, though it's obviously difficult to price natural resources and the environment that'll be impacted. West Cumbria Mining Ltd's finances means that we end up paying more than we get back, with company executives walking away with bonuses and huge profits that happen outside the reach of the UK tax authorities.
Original research by Vivek Krotecha, 2021
Published: 01/09/2021
