Maltby Colliery faces threat of closure

Maltby Colliery in Rotherham has been producing coal for more than 100 years, but the presence of gas, water and oil in the development of a new face has fuelled uncertainty over the site, which employs about 500 people.

Its owner, Hargreaves Services, said the outcome of further investigations at the panel, known as T125, by its mining experts and external consultants should be completed by the end of next month.

It added: “We anticipate that the abandonment of the T125 panel would lead to the mothballing or even closure of the mine as it would probably be uneconomic to switch production to a later panel due to the long face gap entailed.”

Maltby produces more than one million tonnes of coal per year, with about 60 per cent of its total output supplied under a long-term contract with Drax, Europe’s largest coal-fired power plant.

Much of the remaining production is sent to Hargreaves’ Monckton works near Barnsley, which produces 200,000 tonnes of coke for use in the production of glass, detergents and steel manufacturing.

Hargreaves said it was confident that it had found international coals with a very similar, although not identical, specification to Maltby coal.

The company first disclosed the problems at Maltby in May, describing the conditions as unprecedented and warning that delays in T125 production could cost it £16m in profits for the year to May 2013.

Shares fell 20 per cent today despite chief executive Gordon Banham insisting the company was strong enough to absorb any possible closure of Maltby.

As the largest importer of coal into the UK through terminals at Immingham and Newport, Hargreaves said its overall progress remained strong with profits rising by 16.8 per cent to £43.1m in the year to May 31.