Magazine article The Spectator

Be Thankful for Cheshire Salt: At Least We Don't Have to Buy the Stuff from Russia

Magazine article The Spectator

Be Thankful for Cheshire Salt: At Least We Don't Have to Buy the Stuff from Russia

Article excerpt

The winter is arctic and the economy is a long way from spring, but commodities are hot again. Gold, the doomsters' favourite, has a charmed life of its own, though its recent ascent has run out of oomph. Copper, the metal of choice for professionals betting on global recovery, perked up at the beginning of 2009 and has climbed steadily most of the way back to its 2008 peak. Nickel, zinc and aluminium bounced last spring in anticipation of a surge of industrial demand and continue to zigzag upwards, offering good returns for those who get their timing right. But the natural resource du jour is a basic commodity for which, until the snow started falling a month ago, no hair-gelled hedge-fund player would have shown any appetite at all, except on the rim of his margarita glass or his platter of foie gras: plain old salt.

It's rather pleasing that the quiet little towns of north Cheshire - which have been mining salt since Roman times but have long been looked down upon by posh folk from Chester to the west and footballers' wives from Wilmslow to the east - have suddenly become the Klondike camps of a midwinter gold rush. Two-mile convoys of trucks have been waiting to pick up precious supplies of grit treated with brine from the Salt Union depot at Winsford and rock salt from British Salt at Middlewich. For anyone interested in industrial history, it's also pleasing to discover how these forgotten corporate veterans have survived.

Salt Union, as its name suggests, was an amalgamation (in 1888) of numerous Cheshire mining operations. Its product was distributed by barge, hence its headquarters at Runcorn where the Manchester Ship Canal met the Bridgewater and the Weaver Navigational, providing distribution throughout new industrial England. The company eventually became part of ICI until it was spun off in 1992, and is now owned by Compass Minerals Inc of Kansas - the world's third largest salt producer, whose shares have risen steeper than the copper price since last summer when the smart money decided to ignore long-range weather forecasts and bet on a big freeze.

British Salt, meanwhile, turns out to be majority-owned by you and me, the British taxpayer, by way of the private equity arm of what used to be Lloyds TSB. And a third player in the industry - processing raw product from Salt Union - is Ineos, the industrial chemicals giant assembled in recent years by a bold but low-profile entrepreneur called Jim Ratcliffe. Ineos made headlines in 2008 by standing up to strikers at the Grangemouth oil refinery, provoking a memorable example of BBC anti-business bias when Eddie Mair, the presenter of Radio 4's PM programme, snarled at Ineos's local manager: 'You're venture capitalists, aren't you?'

Well, it's lucky they are, and that they and other investors have kept faith with Cheshire's saline heritage - otherwise we might have to depend on that nice Mr Putin to keep our winter highways open, just as we are becoming dependent on him for energy supplies to keep our central heating running. Salt mines, mostly in the Perm region of the Urals, used to be big business in Russia, and have special significance in the collective memory there as places of incarceration and punishment. So I'm guessing that when Boris Yeltsin staved off state bankruptcy in March 1995 by auctioning Russia's most valuable natural resources to a gang of would-be oligarchs, the bidding was less keen for the salt than it was for the oil and gas. …

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