Coal news and updates

MPs and unions are putting pressure on the government to save two of Britain’s last three pits, as UK Coal teeters on the brink of insolvency.

On Wednesday, the UK’s largest coal mining company started statutory redundancy consultations with staff at its Thoresby and Kellingley collieries, and warned that cuts would be necessary even if government support staved off immediate closure.

 

UK Coal, which has been hit by the strong pound and cheap imports, has asked for £10m from Whitehall to keep the mines open until October 2015. The Doncaster-based company also operates six surface mines.

Hargreaves Services, Britain’s only other significant producer, said it had “offered assistance”.

“Hargreaves is not in discussions to buy UK Coal,” the group explained on Wednesday. “As the UK’s biggest coal company, Hargreaves has extended offers of assistance to all the associated stakeholders to help try to find a solution to assist UK Coal.”

Durham-based Hargreaves, which offered £20m for UK Coal last year, is an importer of coal that also supplies power stations. Coal is still used to generate about 40 per cent of the UK’s electricity, but roughly 90 per cent of coal burnt in the UK is imported.

Nigel Adams, Conservative MP for Selby and Ainsty, whose constituency includes Kellingley, told ITV that he would ask the government to help.

“It’s terrible news,” he said. “I’ve got personal involvement. My family have worked there as coalminers, so today’s announcement by UK Coal is certainly the worst news we’ve had in a very long time for jobs.”

Yvette Cooper, the shadow home secretary and MP for Normanton, called for government intervention.

The Thoresby and Kellingley deep mines employ 1,300 of UK Coal’s 2,000 staff.

UK Coal was rescued last year by the Pension Protection Fund, which preserves the pensions of employees whose companies go bust, but is on the brink again. The business is owned by an employee trust after a 2012 restructuring.

UK Coal said talks with the government and the PPF were continuing but that job cuts would be needed in any event.

Trade union leaders visited Brussels to seek aid from the European Commission. They said the commission would fast-track any application for state aid and that the government should invest about £50m to prolong the pits’ life.

Redundancies would cost at least £30m in benefits, the TUC said.

Closing the mines would also increase the UK’s dependency on Russian and other foreign-sourced coal, just as the West is contemplating sanctions on Moscow.

Chris Kitchen, general secretary of the NUM, said: “There is no economic case for the UK taxpayer to pay more to close pits than to keep them open. The Commission says there is no obstacle in providing modest help. All it would take to secure thousands of good jobs is a commitment from this government.”

 

 

Source: ft.com