Working paper

Managing coal mine closure: achieving a just transition for all

Coal Regional economics Social change Employment

Over the last half century, large-scale changes to coal industries across Europe, and more recently in the United States and China, have resulted in as many as 4 million coal workers losing their jobs. Drivers of these changes are found in mine mechanization, government policies and competition from other fuels in down - stream energy demand markets.  The impact of coal use on air and water pollution requires that these impacts are mitigated by using less polluting fuels . Shifts away from coal arise, as the cost of alternative fuels decreases and their availability increases. In different countries this shift has been caused by a variety of factors including increased use of nuclear power, increased availability of natural gas and, more recently, increased use of renewable energy . As commercial concerns impact coal use, the coal industry turns to the increased use of mechanization to remain competitive. The overall result has been closure of less efficient mines with consolidation around more efficient, lower-cost, mechanized operations. The varying influences these drivers of change may have on domestic policy responses to energy transition does not, however, deter from the inevitability of coal mine closure. In all mine closure case studies, job losses, and the subsequent socioeconomic impacts borne by families and communities in coal-dependent regions, are significant.

At present, economies in Asia, Eastern Europe, and Africa face these same drivers of change. Large job losses are already taking place in China, with other large coal producing countries in Asia likely to follow. Lessons drawn from the experiences of the Russian Federation (Russia), Ukraine, Poland, and Romania, complemented by data on impacts of coal industry adjustment in the United Kingdom, the Netherlands, the United States, and China, show that job losses in the coal industry are indeed inevitable as the industry contracts . Those that bear most of the burden are coal miners, their families, and communities, particularly the mono-industry communities . However, these changes also impact owners and investors in the coal industry . Each of these stakeholders can exercise considerable sociopolitical and economic impact on closure processes . The challenge comes in balancing the diverse needs of all groups.

The narrow economic base of many coal mining regions requires careful mitigation of coal mine closure impacts. Coal mining is often concentrated in regions far from major population and economic centers where alternative employment prospects may be found. As a result, “mono-industry” coal towns and regions face multiplying and damaging impacts from mine closure. The loss of mining employment substantially reduces the flow of income through these local economies—affecting retail, food services, and other dependent sectors, as well as social services . Indeed, the loss of a local economy’s dominant economic engine exposes the fragility of many coal mining regions’ narrow economic base.  Unique characteristics of coal mining communities—such as geographic isolation, disparity of wages, and coal mining identity—pose challenges for recovery efforts. Decades later after a mine has shut down, many coal-dependent regions continue to lag socially and economically.

Therefore, mine closure is, in large part, about mitigating impacts on people and communities. In highlighting the central concern for people and communities, mine closure approaches which adopt “Just Transition for All” principles can achieve meaningful outcomes for mine-affected communities.

In this report, a “Just Transition for All” for coal mine closure is underpinned by:

(i) continuous dialogue and consultation with a wide variety of affected stakeholders to determine scope, scale, and timing of closure;

(ii) adequate planning at the outset which is sustained through dialogue and participatory monitoring during the various stages of closure and transition;

(iii) provision of temporary income support to workers and their families that is complementary to other existing social protection programs; and

(iv) deployment of active labor market policies that offer services, programs, and incentives to encourage and enable re-employment among laid-off workers. 

Nine lessons learned on managing coal mine closure are proposed. They are organized around three pillars:

  1. Policies and strategy development;
  2. People and communities; and
  3. Land and environmental remediation

Given the energy transition, planning and preparing for coal mine closure are essential to lessen the shock to coal-dependent communities and facilitate new employment possibilities for redundant workers. A sustained commitment will be required from several stakeholders—governments, international financial institutions, the private sector, and civil society—to ensure this is achieved. Forward looking, governments can augment the findings from this report with country- and region-specific diagnoses of the drivers to reform their respective coal sectors, address their social protection needs, and mitigate environmental risks . Collaboration is also necessary to implement the support programs for laid-off workers, their families, and their communities focused on helping them get back into productive employment, with programs and initiatives that facilitate broadbased economic growth and job creation by the private sector. Strong analysis to inform decision making, together with mobilization of public and private sector financing, will be critical. Going even further, considerations regarding regional economic diversification and rejuvenation to foster job creation beyond coal mining are also of importance, but beyond the scope of this report. Calling on all those with expertise and resources will require leveraging existing, and putting in place new, platforms, partnerships, and ways of working that can catalyze action at the scales commensurate to the needs of a Just Transition for All.

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