Coal news and updates

 

Hargreaves Services has pulled out of a plan to provide a loan to UK Coal, throwing into doubt the goal of a managed wind-down of two of Britain’s last remaining deep coal mines.Aim-quoted Hargreaves had been expected to put £5m into a £20m package of commercial loans to UK Coal, which has been struggling because of low coal prices.

With the loans UK Coal hoped to stave off the threat of immediate insolvency, with potentially 2,000 job losses, and instead manage an 18-month wind-down of its business.

UK Coal called Hargreaves’ decision “disappointing” and said it was looking at alternative ways to secure the managed closure plan.

Hargreaves, which operates nine surface coal mines in the UK and is also the country’s largest independent coal importer, said it was pulling out because no plan had been secured that it could support, though it gave no details.

“As things have developed it’s proved to be very difficult, very complex, despite everybody’s best intentions and endeavours,” the company said.

The Hargreaves loan was to have been accompanied by £5m from Harworth Estates, a property company that is majority-owned by coal pension funds, while the UK government would have loaned £10m.

That money remained on the table, the government said, while UK Coal said it was pursuing alternatives to try to secure the managed closure plan for Kellingley, a pit in Yorkshire, and Thoresby in Nottinghamshire.

“UK Coal will continue to work with government, Harworth Estates, employees and the trade unions, and will provide an update in the coming days,” the company said.

The government said it was “continuing to do everything it can to help in this challenging and unique situation”.

“The £10m we put forward, as part of a private sector-led initiative, remains on the table to assist a managed closure of the deep mines. We are open to exploring proposals put forward by any parties, but any use of taxpayers’ money will of course need to represent value for money,” it said.

UK Coal was also hit by a fire at Daw Mill, its largest underground mine, last year, leading to that mine’s closure. It also owns six surface mines and said in April that there had been potential interest in investing in these mines but no offers.

Hargreaves remains pivotal to the survival of what is set to become the UK’s last deep coal mine, Hatfield in South Yorkshire. Hargreaves has an offtake agreement until the end of 2015 with Hatfield, which is owned by an employee benefit trust.

 

 

Source: http://www.ft.com/