Turkish coal mine disaster cranks up pressure on utilities

A coal mine explosion and fire which have killed more than 200 people in Turkey coincides with increased pressure on utilities to drastically improve safety and environmental standards for miners risking their lives.

Coalmining is responsible for more fatalities than the production of any other energy source because of poor working conditions in producing countries such as China, Turkey, South Africa, Indonesia and Colombia. It is also a major world polluter.

The disaster in western Turkey is likely to be the worst in a series of incidents in a sector that has seen 30,000 people die since 1970. A coal mine collapse in the US state of West Virginia killed two workers this week at a facility that had “chronic compliance issues” and received numerous citations from inspectors last year.

Last month, two workers were killed in Australia after a supporting wall in a coal mine about 240km west of Sydney gave way, trapping the two men about 500 metres below the surface.

This deadly record is putting pressure on utilities from shareholders to source their coal in a more ethical and environmentally friendly way to save miners and reduce pollution. Despite its poor record, coal accounts for more than 40 per cent of global electricity generation as coal-fired power stations are relatively cheap to build and operate.

Under scrutiny from major shareholders including Norway's sovereign wealth fund, some energy companies have begun to take action, clubbing together to form the Bettercoal group to improve ethical, social and environmental standards.

“There is increasing awareness of coal’s destruction . . . and also understanding that alternatives are possible,” said Ailun Yang, senior associate at the US World Resources Institute.

The coalmining sector’s dismal fatality record since 1970 compares with 20,000 deaths in the oil sector and about 1,500 in natural gas, according to estimates from the Paul Scherrer Institute, a Swiss natural and engineering sciences institute.

Other estimates are much higher with Hazardex, a specialist in safety information, saying that China’s death toll alone is more than 1,000 a year.

Meanwhile, the World Health Organisation said last month that air pollution, partly caused by burning coal, killed seven million people worldwide in 2012, making it the world’s single biggest environmental health risk, and the WHO recommended “the movement away from dirtier fuels, such as coal”.

Environmentalists, religious groups, academics, politicians and scientists say the utilities and the banks that fund the coal mining still have not done enough. Norway’s $817 billion (€596 billion) sovereign wealth fund, the world’s biggest, has halved its exposure to coal producers, and chief executive Yngve Slyngstad said in March it would further review investments in the sector this year.

The fund has investments in mining majors such as BHP Billiton, Vale, Glencore Xstrata, and Anglo American, but has dropped Rio Tinto on ethical grounds. It is also invested in some 160 companies that use coal to generate power, such as French utility GdF Suez and another 190 companies that use coal to produce steel.

In the US, Stanford University said this month it would no longer use any of its $18.7 billion (€13.6 billion) endowment to invest in coal mining companies.

Late last year the United Nations’ climate chief urged a radical clean-up of the coal industry, while religious groups in Australia and North America wrote to the pope in February, urging him to encourage banks to move their money out of coal.

Reacting to public pressure, several large financial institutions such as the World Bank and the European Bank for Reconstruction and Development have said they will curb funding for coal projects.

The push for higher coalmining standards follows the success of the fair trade standards for agricultural products such as coffee and chocolate and the campaign against the sale of diamonds mined in conflict areas.

Industry experts say a recent fall in coal prices provides an opportunity to push through a change in mining practices.

“Utilities and investors are in a good position to demand change as there is a global coal oversupply, giving buyers multiple choices to source their coal from,” said one mining adviser who did not want to be named.

Coal prices have dropped about 40 per cent in the past three years following a mining investment boom that has clashed with sluggish demand growth.

Despite international efforts to shift to cleaner and safer fuels, coal’s share of energy generation is still increasing and global carbon dioxide emissions hit a record high last year. Driven by rising use in emerging economies, coal could even surpass oil as the main fuel for the global economy by 2020, energy consultancy Wood Mackenzie said. This highlights the need to take urgent action to improve environmental standards, experts say. – (Reuters)