Coal news and updates

Britain left with just one deep-pit coal mine after govt announces closure of 2 sites

* Sites at Kellingley, North Yorkshire and Thoresby, Nottinghamshire to close

* Government has decided there was 'no case for investment' in sites Will give £10m loan, alongside £10m private sector loan, to manage closure

* The closure of the UK Coal sites will see the loss of 1,300 job

Britain has been left with just one deep-pit coal mine after the Government has announced that two of the last three sites are set to close.

Ministers have decided there was 'no case for investment' and have agreed to a £10 million loan, alongside £10 million from the private sector, to  'manage the closure' of the mines.

The sites - at Kellingley in North Yorkshire and Thoresby in Nottinghamshire - were once bustling, employing around 2,000 each.

The closure of the mines, operated by Britain’s largest coal producer, UK Coal, will see the loss of 1,300 jobs.

But now it seems the mining industry is on the brink of extinction after the Government announced they are to be wound down by autumn 2015.

The Government's move to manage the closure, spares the company the prospect of immediate insolvency which would have cost the Treasury 'significant losses and liabilities' from redundancies and unpaid taxes.

In a written statement to MPs, energy minister Michael Fallon said: 'The taxpayer is better served by supporting a managed closure of the mines.

'However, deep coal mining remains an inherently risky business. There is no value for money case for a level of investment that would keep the deep mines open beyond this managed wind-down period to autumn 2015.

'Private sector investors who wish to put in the substantial investment that would be needed to maintain the mines beyond autumn 2015 without government support remain free to do so.'

Mr Fallon said the Government intended to participate in a private sector-led consortium 'to avoid the immediate insolvency of UK Coal'.

The proposal, which ministers have been considering since March 21, would see the deep pits face a phased shutdown and UK Coal’s six surface mines sold off.

Mr Fallon told MPs that the Government’s agreement to participate was subject to final terms 'that provide adequate protection to taxpayers' as well as assurance of backing from all parties including trade unions.

He said a 'rapid response service' would be available to help employees try to find new work and retraining.

Mr Fallon said directors of UK Coal had approached the Government at the end of January to report that a falling coal price, exchange rates and other factors meant that 'the viability of the business was potentially in doubt'.

It is understood that private sector investment will come from rival mining group Hargreaves Services and Harworth Estates, landlord of the two mines.

Mr Fallon said in a separate statement: 'We are doing everything we can to help in this unique situation.

'Our commercial loan, as part of this private sector-led initiative, can support a managed closure that is in the best interests of the taxpayer and employees. The only alternative was immediate insolvency.

'It has been a real collective effort to get to this point, but this remains a challenging situation and all parties need to continue working closely together.'

Source: www.dailymail.co.uk