The Independent reported that Corus is set to decide on a proposal to build a coal mine at its steelworks in Port Talbot in Wales within a year. The company is this month pressing ahead with GBP 6 million worth of geoseismic studies to scope out the scheme, which could cost hundreds of millions of pounds and create 500 mining jobs. If the plan goes ahead the Port Talbot plant will be the only steel factory in Europe to source coal on site.
Mr Kirby Adams, the outgoing CEO of Corus, said that "If the exploration is a success and the investment can be funded, then that would underpin forever the economics of steel making at Port Talbot because it would remove all the transportation costs of moving one of our raw materials halfway around the world to get here."
Mr Uday Chaturvedi MD of Corus Strip Products UK said that "We will make a decision on this within a year."
Although several Australian steelworks have coal mines on site, there is nothing of the kind in Europe. Corus has been considering the Margam mine venture at Port Talbot since the company first applied for a mining licence for the site in 2005. Initial estimates have suggested that as much as 35 million tonnes of coal could be deep under the hills surrounding Port Talbot, enough to supply the plant at full capacity for 15 years.
But it has never been extracted because it is buried at technically tricky depths of up to 1,000 meters. Thanks to improvements in mining technology and the ever rising cost of coking coal and transportation, the economics may have changed. And the deposit has larger, as yet unexplored areas which could increase the size of the project even further.
It may be noted that Corus, acquired by India's TATA Steel in 2007, was hit hard by the global downturn, which decimated the construction and automotive markets, the main consumers of steel. In total, some 7,000 jobs were axed and, at the worst point, the group was losing GBP 100 million every month. Because of the collapse of an off-take agreement, the Teesside Cast Products facility was mothballed earlier this year and Corus is still desperately trying to find a buyer.
But a massive cost cutting program at Port Talbot helped the plant to meet its GBP 220 million cost saving target. And over the last two years the company has invested GBP 100 million to improve the efficiency of the facility and reduce its environmental footprint. Some £60m was spent on a basic oxygen steelmaking facility to recycle the waste gases produced in the main plant, helping cut a whopping 240,000 tonnes from the site's annual carbon emissions.
(Sourced from www.independent.co.uk)
