Madrid, Spain mining riots for coal subsidies

While the United States Congress debates HR4402, a bill which would make it easier and cheaper to mine in the United States, Spanish coal miners are protesting cuts by the Spanish government in subsidies to unprofitable coal mines.   These two seemingly unlinked news stories, highlight the tricky question of to what extent a government should go to nurture a home-grown mining industry when it is cheaper to mine elsewhere.

First some details of the Spanish situation from this report:

Violent clashes had already broken out between miners and police in weeks of protests in northern mining towns over Madrid’s decision to slash coal industry subsidies this year to 111 million euros ($US136 million) from 301 million euros last year.   Unions say the cuts will destroy coal mining, which relies on state aid to compete with cheaper imports, and threaten the jobs of some 30,000 people directly and indirectly employed by the sector, including 8,000 coal miners.

An emotional story is to be found at this link; here are some graphic extracts:

They came with helmets on their heads and the worried look of men with no future on their faces. But the Spanish coal miners who marched through Madrid on Wednesday were clear that they would not give up on their life-or-death struggle for the future of their collieries.

The miners had brought with them the dust of Castile, the sun-baked central region of Spain that 200 of them had walked through on their 400km, three-week march to reach the capital. Many had wept when they were greeted by crowds of supporters in Madrid.

“If the mining companies don’t get their subsidies this year, then there will be nothing to negotiate next year as they will have to close,” he said.

“If the mine closes then the whole community will disappear. We saw that happen in the neighbouring colliery at Cistierna. They closed it and a community of 2,000 people now has just 150 inhabitants.”

With Spanish unemployment at 24%, few miners believe they can find jobs elsewhere. “I have two children. They are already taking away grants for school and university,” said Duran. “If there are no jobs in the mine, what future will they have?”

Angelita Arias, from Santa LucÌa de Gordon. said: “The trouble is that everyone depends on the mine and if it closes then the town dies. My daughter used to work for the regional television station, but she was laid off. Now she has opened a bar, but, if the mine closes, she will have to close that, too.”

“We think they should keep the mines running because who knows what might happen to the supplies from other countries?” said Exposito. “If they suddenly dry up, for whatever reason, Spain will need its own stock of coal.

“Mining is all we know. My wife, for example, is the daughter, granddaughter, sister, sister-in-law and wife of miners.”

But the chances that their children would also be miners are slim. “The future is as black as coal,” he admitted.

Graphic stuff and we can all sympathize with them on a personal basis.   And that is the problem.  On a personal basis we find it easy to empathize with miners thrown out of work.  But is it the role of the government to subsidize mining to keep people employed?   Margaret Thatcher answered that question in Britain many years ago.   Many would argue that the US 1872 mining law amounts to a massive taxpayer-funded support of US mining.

The statement I found most similar to US arguments about rare earth is “If they [that is foreign supplies of coal] suddenly dry up, for whatever reason, Spain will need its own stock of coal.”   Which nicely poses the question: to what extent should taxpayers, in a faltering economy, keep mines open just in case some other cost-effective supplier decides not to send supplies?  It is hard to envisage Canada or Australia refusing to send coal to Spain.  You could argue that it is feasible to envisage China cutting off supplies of rare earths and the Mountain Pass Mine in California being unable to meet national demands.

At the expense of frivolity, is this an opportunity for Canada or Australia to give blanket immigrant status to all the no-longer-subsidized Spanish miners and help them go mining in another country.  Afterall that is the way of mining.  A mine opens, people gather and prosper, the mine closes, and the people move on.  It will happen even to the Pebble Mine.   Can you imagine the ballyhoo when Alaska is called on to protect the State’s way of life by subsidizing the waning stages of the large mine a hundred years hence?

Sustainable mining is supposed to prevent the Spanish situation.  But of course sustainable mining is a myth.  It is too easy to mine, to prosper, and to fail open anything other than bars, brothels, and bottle stores (the old South African term for liquor outlets.)  Actually Spain appears to have failed to develop anything other than houses for other Europeans who are no longer buying.

So we leave the story for now, but will watch it unfold with interest.