Coal news and updates

Fate of UK Coal set to be revealed

The fate of Britain's largest coal producer is expected to be announced today with the Government due to deliver an update to MPs on talks over its future.

UK Coal has warned that it needs to secure an emergency cash injection of up to £20 million, which it is hoping to secure through a combination of taxpayers' funds and the private sector.

But it has made clear that the money will only be enough to carry out the managed closure of two of Britain's three remaining deep pits over the next 18 months, with the loss of more than 1,300 jobs.

The company has already begun consulting on plans to shut Kellingley in North Yorkshire, which employs 700 people, and Thoresby in Nottinghamshire, which employs 600. Jobs are also likely to go at its head office in Doncaster.

It will leave employee-owned Hatfield colliery in South Yorkshire as Britain's last remaining deep-pit mine - leaving a once-mighty industry teetering on the edge of extinction.

UK Coal has been hit by a strong pound and the increasing availability of cheap coal imports - especially from the US, where the shale gas boom has forced producers to find new international markets.

The majority of the 2,000 people employed by the company - which also operates six surface sites - are likely to face a bleak future, nine months after it was rescued from administration.

Prime Minister David Cameron has said the Government is doing everything it can to help preserve jobs, though he warned: "There are obviously limits. This is taxpayers' money that is involved. But we will work with them as closely as we can."

Labour has accused the Government of adopting an "inflexible attitude" over rules on potential support for UK Coal.

The TUC says that £10 million is likely to be provided by the Government towards the closure of the deep pits and that the taxpayer will also lose out on tax and national insurance contributions of £30 million a year.

It says it has devised an alternative rescue plan that will cost £50-£60 million.

UK Coal supplies fuel to power stations providing 4% of the UK's electricity needs. Coal accounted for 36% of electricity generation in 2013.

But Government officials believe the closure of the deep pits poses a low risk of impact on security of energy supply. They argue that UK Coal's surface mines should enable its production to continue at 40% of its current rate.

UK Coal's surface mines operate at Butterwell, near Morpeth in Northumberland; Huntington Lane, near Telford in Shropshire; Park Wall North, near Crook, County Durham; Potland Burn, near Ashington, Northumberland; Lodge House, near Ilkeston, Derbyshire; and Minorca, near Measham, Leicestershire.

The firm went into administration in July following a fire that closed its Daw Mill pit in Warwickshire a year ago, resulting in 350 job losses.

But it was saved in a restructuring that saw it taken over with the backing of Britain's pension rescue scheme, the Pension Protection Fund (PPF), in a deal that was hailed as helping to keep the lights on in the UK.

Source: www.expressandstar.com