The Business Minister is expected to announce today that the Government supports, in principle, making a £10m loan to UK Coal.
The money, which would double with contributions from the private sector, would pay for the managed closure, over 18 months, of Kellingley colliery in North Yorkshire, which employs 700 people, and Thoresby colliery in Nottinghamshire, which employs 600.
Michael Fallon revealed his intentions at a meeting with trade unions yesterday and is due to make a statement in the House of Commons today.
The commercial loan would come with conditions. Interest would be charged at ten per cent and the Government wants a share of the final operating profits of UK Coal, which are expected to be around £8m, to recover taxpayers’ money.
But Chris Kitchen, general secretary of the National Union of Mineworkers, told The Yorkshire Post that the loan conditions are “extortionate” and would leave little left to be divided between workers who would lose their livelihoods as compensation.
Mr Kitchen said: “A loan from the Government is better than the directors putting the company into receivership on Friday but we believe it’s short-sighted on behalf of UK government. We think that in the long-term closure will be more costly for the taxpayer than putting £70m in to a survival plan. Forty per cent of our electricity is generated by coal and it will leave us more reliant on imported energy.”
The NUM would continue to put forward its case in the hope of forcing a rethink, he said.