UK Coal seeks financial help to keep mines open

Thoresby Colliery Thoresby Colliery in Nottinghamshire is one of only two remaining deep mines

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UK Coal is appealing for urgent financial help which it says is required to keep its mines open.

The coal mining firm says it is in advanced talks to raise "at least £10m" needed and is working with the government and private investors.

Andrew Mackintosh from UK Coal said the firm was "very confident" of being able to get the cash and find a long-term investor in the business.

It currently owns eight pits across England, employing 2,000 people.

UK Coal currently has two working deep mines - Thoresby Colliery in Nottinghamshire and Kellingley Colliery in Yorkshire.

It also has surface mines operating in Northumberland, County Durham, Derbyshire, Shropshire and Leicestershire with six more proposed sites across the country.

'Difficult days ahead'

Mr Mackintosh blamed the firm's latest financial problems on the global market with falling coal prices on top of a fire which destroyed, and subsequently closed, its Daw Mill Colliery in Warwickshire.

Analysis

It may surprise many people in Britain on this, the 30th anniversary of the miners strike, that coal is still a vital part of Britain's energy requirement. In fact it accounts for 40% of the energy mix with the vast majority coming from overseas markets such as Colombia, Russia and the US.

UK Coal, which is the remnant of the old Coal Board which so bitterly fought Arthur Scargill and the NUM in 1984, accounts for 4% of the UK's energy needs.

That UK Coal could face administration twice in as many years is testament to the flimsy margins on which coal producers operate these days.

Whereas last year a huge fire at the company's Daw Mill plant pushed it into administration, this year UK coal faces a double whammy of issues beyond its control.

Coal is priced in dollars and even though UK Coal only sells locally, the recent rise in Sterling has made their produce more expensive. On top of that the global price of coal has fallen thanks in part to an abundance of shale gas in the US.

Both these factors could be enough to push the company to the edge - assuming of course that an imminent deal to secure fresh investment falls through.

Last year the firm said it had gone into administration as a result of the fire.

Mr Mackintosh added: "We do need that investment, It is important for the future.

"There are difficult days ahead but at the moment everything's looking positive as far as discussions are concerned.

"We have got to make sure discussions are completed soon so we can start talking about where we go from here."

In November, Chancellor George Osbourne announced a financial boost for pit workers following UK Coal's administration.

Conservative MP for Sherwood in Nottinghamshire, Mark Spencer, said he had been working with energy minister Michael Fallon and trade unions for the last month.

He said: "We knew this challenge was coming and have been working to secure a deal for the last month.

"This has been a fairly traumatic few weeks and luckily we are much closer to finalising something.

"Without this money the firm would be in receivership. It will mean the closure of the collieries. But there are too many people with a vested interest in making sure that doesn't happen.

"There is still £80m worth of coal still under the ground at Thoresby so investing the money now will secure those jobs and ensure that Thoresby, and the business, can continue to make a profit."

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