The Problem of Surplus Productive Capacity in the Coalmining Industry

The coalmining industry in most countries has, at various times, suddenly been confronted with a decrease in demand for coal. Readjustments made to reduce productive capacity to match the reduced demand for coal have often resulted in hardship to mineworkers, loss of capital investment to mineowners and loss of coal reserves. The consequences of the methods of readjustment adopted in the past have contributed to the low esteem in which coalmining has come to be regarded by a large section of the gel).eral public in many countries.Four sections of the coalmining industry, representing different periods of time, different countries, and different methods of industrial organisation have been examined:Great Britain and the U.S.A. during the inter war years, the post war European Coal and Steel Community, and post war Great Britain under the National Coal Board. An assessment has been made of the methods adopted in each case to reduce productive capacity to match a reduced demand for coal. Finally the fundamentals of the problem-as it affects the coalmining industry of any country-are considered, and possible solutions put forward.During the 1950's, surplus productive capacity was a problem in many coalmining countries, including Australia and New Zealand. As a rule no techniques are developed beforehand to solve problems introduced by a sudden decrease in demand for coal. The situation is usually tackled by a series of short term decisions based on expediency, which often in the long run only aggravate the problem.