UK Coal urged to ‘full engage’ with unions for pit survival plan

Speaking after he met with Energy Minister Michael Fallon yesterday, National Union of Mineworkers’ (NUM) general secretary Chris Kitchen urged the ailing coal company to meet with unions in a last-ditch attempt to keep Kellingley Colliery in North Yorkshire, and Thoresby in Nottinghamshire, open long-term.

Last week a managed closure plan that would keep UK Coal in business until 2015 was cast into doubt when a private backer who had pledged £5m towards a £20m closure plan backed out.

The cash from mining group Hargreaves Services, along with £10m from the Government and £5m from landlord Harworth Estates, had previously been backed by workers at the pits - both of which are now back in production.

Kellingley, Mr Kitchen said, is around £1m and just over 10,000 tonnes ahead of its production targets over the last five weeks, and the union is fighting to keep it open for another four years.

Both the NUM the TUC believe that a larger state loan to keep the mines open until 2018 could be cheaper in the long run than letting UK Coal close the mines down, with increased tax revenue and unemployment benefit savings. The TUC commissioned a report that said state aid - in the region of £63m-£74m - could be covered by projected profits from future coal sales if the mines were kept open longer.

Yesterday the unions urged Mr Fallon to reconsider funding the company long-term, which it believes can be profitable again.

Mr Kitchen said: “The minister is using the argument that he hasn’t been asked to look at any other plans for state aid - just the 18 month closure plan.

“At the moment, UK Coal seem reluctant to look at anything other than the 18 month closure plan. The danger is, if we can’t get it done quick enough the pit could end up shutting.

“We need UK Coal to engage more fully with the trade unions to come up with a survival plan which can be put to the minister for him to consider state aid.”

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.

Mr Fallon said then there was no case for investment in the “inherently risky business” to keep the two sites open in the long-term, and any use of taxpayers’ cash would have to represent good value for money.

Since the plans were announced, production at Kellingley has re-started and the company is performing strongly.

UK Coal said it is actively pursuing other potential investors to plug the gap left by Hargreaves in the hope of pursuing the closure plan. A spokesman for the company told The Yorkshire Post it was “very happy” to speak to the NUM and TUC following the meeting. He said all options, including applying for European funding, had already been investigated by the company.

He said: “The thing that was very clear to us, given the time constraints we were under, was the only option to us was the 18-month closure.

“If we don’t get the 18-month close down there is no company to talk about, we’d be insolvent.

“We’d like to get the 18-month close down then we have time to negotiate further.”