Mine closure deal collapse could be the chance to save pits long-term, say union

Kellingley Colliery.
Kellingley Colliery.
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THE COLLAPSE of a £20m plan to manage the closure of two of the country’s last remaining deep-pit coal mines could be an opportunity for the Government to “look afresh” at the scheme and save the pits long-term, a mining union has said.

Workers at Kellingley Colliery in North Yorkshire and Thoresby in Nottinghamshire face deepening uncertainty over their immediate future after one of the private backers of the closure plan, mining group Hargreaves Services, pulled out of the deal yesterday.

It had pledged a £5m loan, which along with £10m from the Government and £5m from landlord Harworth Estates, would have kept UK Coal in business - and staff in their jobs - until autumn 2015.

The Whitehall cash is still on the table with officials ready to look at backing from other parties, and UK Coal said it was still pursuing alternative options.

But the National Union of Mineworkers told The Yorkshire Post it believes the Government should “look afresh” at the plan, and increase its loan to £50m to keep the pits, which are now back in production after months without producing coal, open for at least the four years.

General secretary Chris Kitchen said: “There is now a £5m hole to fill. The Government could fill that hole but given that over the last three months while this closure plan has been negotiated, things at Kellingley and Thoresby have picked up, our view is quite simple, UK Coal is a viable business and both pits are viable long term.

“Whilst it is unfortunate that Hargreaves has walked away, because of the commitment shown by employees and the up turn in the business, we believe the Government should look with a new perspective at keeping the business going long term.”

A Government spokesman said is was open to exploring proposals put forward by any parties, but “any use of taxpayers’ money will of course need to represent value for money.”

He added: “The Government is continuing to do everything it can to help in this challenging and unique situation.

“The £10m we put forward, as part of a private sector led initiative, remains on the table to assist a managed closure of the deep mines.”

UK Coal first announced plans to close the mines in April.

It warned that without the managed close deal the business was “likely to enter insolvency in the coming days” - and the loss of 1,300 jobs.

Energy minister Michael Fallon said then there was no case for investment in the “inherently risky business” to keep the two sites open in the long-term.

Workers at Kellingley reluctantly voted to accept the plan, in a bid to keep the business going for as long as possible in the hope that an alternative solution could be found.

Last month the first wave of ‘at risk’ letters were sent out to staff at Kellingley, Thoresby and UK Coal’s head office at Doncaster. The NUM warned that the letters were sent “too soon” given the closure plan had not yet been formally signed.

Commenting on Hargreaves announcement yesterday, UK Coal said: “Disappointing as it is to lose one of the parties at this stage, UK Coal is pursuing options around alternative solutions to secure the managed closure plan.

“UK Coal will continue to work with Government, Harworth Estates, employees and the trade unions and will provide an update in the coming days.”

In a statement, Hargreaves said: “It has not been possible to secure a plan that it is able to support. In these circumstances the company is no longer able to provide loan finance and has now withdrawn from the process.”

Chief executive Gordon Banham said: “It is with great regret that this announcement is made today.

“However we would like to recognise the help and efforts of the Government, unions and other stakeholders including Harworth Estates, in trying to develop a plan that we could support.”