The immediate future of Yorkshire’s employee-owned deep pit coal mine has been secured after a £4m loan from the National Union of Mineworkers.
Hatfield Colliery near Doncaster, which has been in the hands of workers since December 2013, required investment to bridge a gap in production as it moves towards mining to a new coal face at the end of the year.
The investment will keep almost 500 employees in their jobs for at least 18 months, and the colliery is working on further measures to ensure the future of the pit long term, John Grogan, chairman of Hatfield Colliery’s Employee Benefit Trust (EBT) Board said.
The loan gives time to negotiate new contracts with the ‘Big 4’ coal-fired energy generators, Drax Power Station, near Selby, Scottish & Southern, which runs Ferrybridge power station in West Yorkshire, EDF and EON.
“It’s rare to have any good news about the coal industry,” Mr Grogan told The Yorkshire Post. “Now that we have this breathing space, and given that the NUM have put their confidence in us, we need to speak to the generators. They are the ones who have to decide if they want the mining industry in the UK to continue.”
Hatfield wants the Big 4 to agree to pay above the current world coal price so it can invest in working on further coal faces that will keep the pit open beyond spring 2016.
It is calling on the generators to recognise their “corporate social responsibility” by sourcing some from a mine which, “unlike many based overseas,” insists on the best health and safety standards.
Mr Grogan said: “If each of the Big 4 coal fired power generators took a quarter of our annual million tonnes a year of output, they would probably be paying a maximum premium of about £2million each compared with current world market prices.
“For that they would be getting a valuable hedge against future price hikes in world prices or political instability in the main countries we import coal from which are Russia and Columbia.”
While there is “a mood of optimism,” Mr Grogan said staff were realistic that the deal has only bought them 18 months.
He said: “There is going to be a new clean coal power station at Drax in 2020, but will there be any Yorkshire coal burnt there? Unless we can get these contracts the answer is probably no. The stakes are high.”
It is seeking political backing in its efforts to secure the contracts, and next month will hold an open day at the mine where all generators will be invited. Labour leader Ed Miliband, whose Doncaster North constituency includes the mine, will attend.
The NUM said the decision to make the investment was not taken lightly. A spokesperson said: “This action is an unprecedented step for the Union but reinforces its commitment to the deep coal mining industry in the UK.
“It is the view of the Union that there is a future for coal in the generation of electricity in the UK for years to come and that the coal burnt should be UK-mined coal, securing employment for miners in the UK not imported from Russia and Columbia or anywhere else.”
TUC General Secretary Frances O’Grady said the loan would “help protect hundreds of jobs” and offers British energy companies a secure domestic supply, “at a time of so much global uncertainty.”
Hatfield, which was used to film scenes in Brassed Off, is also looking at ways in which is can process residue previously transported to Maltby Colliery, that will take 600 lorry loads off the roads of South Yorkshire each week.