Changing lifestyles in Europe: The Coal and Steel Industry
If you look on a map of global population density, you can see four or five major concentrations of people:
East Asia, South Asia, North America and Europe. Many of the cities that developed in Europe grew on coalfields as a result of the industrial revolution. But today the factor coal become more and more unimportant and the people in the coal industry are facing huge problems. The highest rates of unemployment can be found in former coal and steel making communities. Their mines and steel works are now closed or at least reduced in size.
You now might think that the global community is using less coal or steel, but in fact they are still produced in huge quantities. It’s just that the importance of European coalfields is getting smaller and smaller, as new energy sources such as oil, gas, wind and solar power and new materials such as aluminum, glass and plastics. Such changes have affected the lives of many European people.
Coal: Black Gold
There are three different types of coal. Black coal is the oldest and most efficient form of energy. Brown coal has only about half the energy of black coal, and Peat (Torf) contains only very little energy and is used only in very few isolated houses in Europe, with no access to any electricity network.
In the nineteenth century black coal was the most important source of energy in western countries. Steam engines were now in use and it also helped to develop blast furnaces on which the iron and later steel was based. Iron was the main industrial metal in Europe until the 18th century, because steel was only produced in small quantities because the methods were expensive and complex.
In 1709 Abraham Darby produced coke from coal, which was able to burn at higher temperature. Then developments in the steel industry were rapid after the 19th century industrial revolution, so it was now cheaper and easier to produce steel. There were famous inventors such as William Kelly, Henry Bassemer (converter) and the two German brothers Siemens. The Bessemer Converter is a bowl which converts iron into steel. It was then used for all kinds of large-scale work. Steel had become the main factor of industrialization. The railways and by 1880 even buildings were made of steel.
The World Coal Industry today
Coal is found throughout the world, but the quality and the amount are different, as well as the possibility by it can be extracted and transported to the markets.
In the nineteenth century only a limited number of coal deposits in Europe and North America were exploited. But soon the technology of deep mining was developed in Great Britain. The transportation costs were still high, but fortunately coal and iron were often found in the same areas.
By 1950 two major changes had occurred. The first one is that technology had improved so that less coal was needed for each ton of steel produced, and second, more efficient transportation facilities allowed worldwide trade. High quality iron ore and coal could now be brought to Europe from wherever it was cheapest, so large modern steel works could melt it in within Europe. There were different mining methods. While there were open cut mines (excavators) in
Australia, Canada, the United States and South Africa, there were expensive underground mines (complex tunnel system) in Europe. Of course it’s harder to install machinery underground and to dig coal in a narrow network of tunnels, than using big excavators (Bagger). Mining of German coal is even more expensive than importing coal.
Table 20.1 (page 162) shows how many tons of coal were produced in different countries between 1950 and 1990. The amount of coal in Germany decreased by almost 50%, and in Britain, too, less coal is produced. On the other hand, countries like Poland, and especially Australia and South Africa have increased the amount of coal produced by a lot. The global demand still rises, so this is what harms the European industry. Figure 20.6 (page 161) compares the costs of German coal and coal from overseas in 1990. The consequence of this change in production patterns was that many thousands of European miners lost their jobs. Similar changes occurred in iron ore mining and steel making.
Coal: The Treasure Chest of Germany
The German economy was based on black coal for many years. The main coalfields of Germany are the Ruhr and the Saar, with the Ruhr being the largest and most productive one. There were big cities like Düsseldorf, Dortmund, Essen and it’s situated along the Rhine River, which is connected to the Atlantic Ocean, to provide easy ex - and import conditions.
The first mines were small manholes. Later, underground mining began. Today, the coal seams (layers) that lie closer to the surface in the Ruhr Valley are pretty much empty and are worked out, so mining is currently carried out at about 1100 meters below the surface.
Figure 20.9 (page 163) suggests that both supply and demand for coal will continue to increase across the world. However, it seems likely that the amount of coal will increase faster than the demand and this increase in supply will come from the countries of the new world rather than from European coalmines. In Table 20.2 (page 164) you can see how these changes in the world market on coal effect the employment in the mining industry in Germany. Explain...
An Ageing Steel Industry
The steel industry is regarded as the key to the industrialization of any country, since the construction of industrial plants and infrastructure requires a large amount of steel. However, once the basic infrastructure of railroads, roads, bridges and buildings has been established, the demand for steel decreases. Figure 20.15 (page 166) shows the apparent steel consumption per head in various regions of the world.
The old steel producing areas of Europe and the United States exported steel products – ships, cars and machines – to maintain high production levels. Since the middle of the century, high quality iron ore deposits have been found and developed in the southern hemisphere, especially in Australia and Brazil. At first these new sources were exported to steel producers in Europe. Later, however, steel mills were established in the developing countries, too. There are lower wages in these countries as you can see in Figure 20.14 (page 166). It shows the labor costs in selected countries in the world. Explain...
World Markets: Changing Continuously
The global flow of raw materials changes continuously depending on changes in consumption, production and transportation. The German miners appreciate that coal industry will have to be reduced. But they need to have enough time for adjustment. The number of miners has been reduced slowly by pre-retirement schemes which allowed them to retire at the age of fifty with little financial loss. However, the low average age in 1991, as you can see in Table 20.4 (page 166), shows that the majority of miners are too young for an early retirement.
The consequences of changes in the world market on industrial areas are severe. Reducing mines also means taking away the economic foundation of many towns in Europe. An example is the town of Bergkamen, where more than half of the 19,000 people working, are employed in the coalmines. It will take a long time to change the town’s economic structure.
A way of cushioning the effects on a nation’s economy is by investing overseas. In 1991 RWE bought a 50% share of the Consolidated Coal Company in Pittsburgh, the second largest coal company in the USA. Such ownership is a step to reduce the dependence on German coal. Spreading the coal and steel industry worldwide is also a way in which the older industrialized countries can assist the newly industrializing countries towards economic growth.
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Andrew Carnegie and John D. Rockefeller were captains of industries. They helped America become what it is today. They developed company's and industries that impacted the 20th and the 21st Century in such a way that it changed our ideas of management and supply and