Tag Archives: coal

Reading Orwell On Mining and the Metabolism of Civilization

I just finished George Orwell’s Road to Wigan Pier. I wanted to track down the passage about mining and the “metabolism” of civilization that Shefa Siegel refers to in his essay on “The Missing Ethics of Mining” (which I quoted at length in a previous post). It comes early in the book, at the start of chapter two:

Our civilization, pace Chesterton, is founded on coal, more completely than one realizes until one stops to think about it. The machines that keep us alive, and the machines that make the machines, are all directly or indirectly dependent upon coal. In the metabolism of the Western world the coal miner is second in importance only to the man who ploughs the soil. He is a sort of grimy caryatid upon whose shoulders nearly everything that is not grimy is supported. For this reason the actual process by which coal is extracted is well worth watching, if you get the chance and are willing to take the trouble.

There is some uncertainty about the reference to Chesterton here. The editors of one anthology point to a debate about coal mining between Chesterton and George Bernard Shaw. Mark Bernstein and Scott Rosenberg trace the reference to Chesterton’s assertion that civilization “is founded upon abstractions”. I like this better. Pace Chesterton, Orwell anchors civilization in the dark rock world below — the “necessary counterpart of our world above” — and in the hard work of the miners he witnesses: the stooping, the “travelling,” the dust, the deafening noise and the grimy air, the excruciating shovel work at the coal face, which the miners or “fillers” perform kneeling, and in hot, stuffy, dirty cramped spaces, stripped to the waist, sometimes down to their drawers, for 7 hours at a stretch.

Of course what Orwell wrote of coal in the 1930s could now easily be said of oil and gas, and, as Siegel would have it, many minerals as well — minerals we do not see or even give a moment’s thought, but which, like oil and gas, are extracted from the earth (and now, with rare earth metals, from the sea-bottom) at great hazard and great cost. The metabolism of the world (now the whole world, not just the West) has changed, as well as the materials that we now require to keep things up and running. That’s largely because things have changed.

That ordinary expression deserves some careful consideration. It’s safe to say that, although things have changed, we are, for the most part, blithely unaware of the hard, dirty world on which the things that make up our world depend. Or at least we prefer to act as if we are.

We still tend to believe, or I should say we would like to believe that that which does not appear grimy somehow comes into the world clean, the outcome of a great idea, the product of abstraction or an innovative approach, a flash of insight drawn on a cocktail napkin. That belief in the power of great ideas to make up the things of this world makes us especially ill equipped and nowhere near ready to deal with the increasing scarcity of the resources on which the shiny, fast world of things depends.


What’s Mozambique to Michigan?

Tom Albanese has stepped down from his position as CEO of Rio Tinto, after the mining giant announced a $14 billion dollar writedown. While most of those losses were connected with Alcan, the aluminum business, the company also lost $3 billion on a coal project in Mozambique. That’s by far the more interesting aspect of the story, and it’s one that deserves attention not just from investors, industry analysts and Africa watchers, but also from those (like me) with an eye on the company’s operations around Lake Superior, in Michigan’s Upper Peninsula.

Here’s how it all went down in Mozambique. A couple of years ago, Rio Tinto acquired Australian-based Riversdale Mining for $4 billion. Riversdale had a number of coal projects going in Mozambique near Tete, “the coal capital of the world.” Logistics – moving coal in significant quantities from the mines in the Moatize Basin – was a challenge. Some coal mined at Benga could move by rail, pending “final approval by government authorities.” Still, that was only a partial solution; “long term logistics,” as a Rio Tinto presentation [pdf] put it, would be required once the Zambeze and Tete East projects were in full swing.

The company proposed moving Zambeze coal by barge on the Zambezi River. Barges would travel from Tete to the port of Chinde, on the Indian Ocean. The promised solution would not only make the coal business boom in Mozambique; it would also allow for “future growth” and “provide a catalyst for further socio-economic development in [the] region.” The company sought approval for its Zambeze River project by autumn of 2011 and planned to start coal barging by 2014.

All very well, except the Mozambique authorities never approved the transport of coal on the Zambezi.

How could the Mozambique authorities refuse Rio Tinto? After all, the company’s own Environmental Impact Report showed that coal-barging on the Zambezi would have no “significant” environmental effects.

Mozambique Transport Minister Paulo Zucula saw things differently: “the impact was seen to be very negative, and there were no plans for mitigation. As proposed it is not doable,” he said. Barging would adversely affect the river’s fish and dredging would increase the likelihood of floods: “every four years we have problems with flooding and killing people. So if you’re going to dredge the river, expand the banks, we will be in trouble.”

Zucula suggested Rio Tinto move its coal by rail. He has championed the construction of a new railway line from Moatize to the port of Nacala, and helped secure a $500 million investment in the $1.5 billion project from the Dutch government and the European Union. So Zucula may not have been solely concerned with the fate of the Zambezi’s fish or the people living along its banks. But the purity of Zucula’s motives is really not at issue. The issue is that Rio Tinto seriously miscalculated and overplayed its hand in Mozambique.

A blogger in the Financial Times today sees here “a useful lesson for other mega-project investors in emerging markets.” He doesn’t say what that useful lesson is. I’m certain it’s something more than the need for prudence, and that it extends beyond emerging markets. It has to do with overconfidence – hubris, even: “Rio knew what the challenge was. It just couldn’t find an effective answer.” And yet, it forged ahead, certain that it would prevail upon the authorities in Mozambique to see things its way. That was just plain arrogant.

Sam Walsh, the new CEO of Rio Tinto, should take this $3 billion lesson in humility to heart. At the very least, he and the board of directors might ask whether the company’s failures in Mozambique are the outcome of behaviors that are in evidence elsewhere.

In Michigan’s Upper Peninsula, where the company is developing the Eagle Mine, it faces a set of challenges of the same kind if not of the same magnitude as those it faced in Mozambique. The mine is being built on a site sacred to Native Americans and will be situated in the heart of the Yellow Dog Watershed, which feeds into Lake Superior. The company has run roughshod over Native American claims and issued familiar and predictable assurances that it will be a responsible steward of the environment – whatever that means when you’re extracting sulfide ore in the middle of a fragile watershed ecosystem. As for logistics, Rio Tinto was banking on the approval and construction of County Road 595, despite local opposition and concern from environmental regulators, just as it banked on the approval of the barge plan in Mozambique.

What could possibly go wrong? Rio Tinto had big Michigan politicians on its side: Debbie Stabinow, Dan Benishek, Rick Snyder, Matt Huuki. Even the Romney campaign was for County Road 595. But the EPA along with local environmental groups objected. After much wrangling, the Michigan Department of Environmental Quality denied the wetlands fill permit for the new road just a couple of weeks ago, on January 3rd: the road did not meet the requirements of the Clean Water Act. Rio Tinto has now had to shift financial support from this $82 million project to improving and upgrading existing roads. It’s as if the company’s blunder in Mozambique found a faint but telling echo in Michigan’s Upper Peninsula.