Ministers confirm mines closure

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Britain’s historic deep-pit coal mining industry is on the brink of extinction after the Government decided there was no case for investment to keep two of the last three sites open in the long term.

Ministers have agreed to a £10 million loan, alongside £10 million from the private sector, to support the “managed closure” of the mines at Kellingley in North Yorkshire and Thoresby in Nottinghamshire.

Together the sites, operated by Britain’s largest coal producer, UK Coal, employ 1,300 people. They are to be wound down by autumn 2015.

The Government backing spares the company the prospect of immediate insolvency which would have cost the Treasury “significant losses and liabilities” from redundancies and unpaid taxes.

In a written statement to MPs, energy minister Michael Fallon said: “The taxpayer is better served by supporting a managed closure of the mines.

“However, deep coal mining remains an inherently risky business. There is no value for money case for a level of investment that would keep the deep mines open beyond this managed wind-down period to autumn 2015.

“Private sector investors who wish to put in the substantial investment that would be needed to maintain the mines beyond autumn 2015 without government support remain free to do so.”

Mr Fallon said the Government intended to participate in a private sector-led consortium “to avoid the immediate insolvency of UK Coal”.