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July, 1962

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Mr. E. H. Browne, Deputy Chairman of the National Coal Board gave the closing address at the International Coal Preparation Congress which took place at Harrogate last month. Mr. Browne reviewed the fluctuating fortunes of the coal industry since 1950 and then looked to the future :— ". . . Oil competition is fierce; in many sectors natural gas threatens to be an important source of cheap energy; and whatever the economics of atomic power may be, it will enter increasingly into the pattern of energy supply.

It is not that we in the coal industry deplore the emergence of abundant supplies of alternative cheap fuels; we recognise the great benefits which a plentiful supply of energy can bestow on mankind, Moreover with the growth of population of the world, the increasing rate of industrial growth, and the advancement of under-developed countries, a huge increase in energy will be required as a whole. 38 years ago in 1924, the world's population was 1,800 million: total energy consumption was about 1,500 million tons of coal equivalent — about 5/6 ths a ton per head of population. Today there are 3,000 million people; 4,500 million tons of energy are consumed — 1½ tons of coal equivalent per head.

Where shall we be 38 years from now? The year 2000 sounds as if it was another era, but is no further away than 1924. By 2000, we are told, the world's population will have doubled, and will stand at 6,000 million, and if energy consumption per head also doubles, and stands at 3 tons — a modest assumption — 18,000 million tons of coal equivalent would be needed. Within such a total there should be ample room for the expansion of oil, natural gas, atomic power and other forms of energy without reducing the need for coal.

The problem for our industry is in the immediate future. Coal mining is inflexible; it cannot easily adjust itself to changes in the level of production. Capacity — and reserves — once lost cannot be regained quickly, if they can be regained at all. Meanwhile the size of the industry — this is certainly true in Great Britain — is a dominant factor in its financial success. Inefficient capacity is being discarded rapidly; but there has been a large capital investment which has created substantial new capacity and the industry carries correspondingly heavy fixed charges. The fixed charges have to be borne and other overhead costs are not easy to adjust in relation to production. It follows that it is of crucial importance to keep the coal industry large enough to use its efficient capacity.

How can we do this in the face of the fierce competition that we are now encountering? I suggest that there are four things of paramount importance in our fight for markets. First we must hold costs of production in order to hold prices, because prices will, first and foremost, determine whether coal will be sold; secondly we need dynamic selling ; thirdly we need vigorous development in all the fields of coal usage; and fourthly we must provide the highest quality and consistency in our finished products."