Kellingley loan deal marks end of deep pits

The company confirmed today that it had secured the funding it needs for a managed closure of Kellingley Colliery in North Yorkshire and Thoresby in Nottinghamshire, with the loss of around 700 jobs.

Both pits will be closed by the end of next year and jobs will also go at the UK Coal’s Doncaster head office.

But the National Union of Mineworkers, which is continuing to put pressure on the Government to provide state aid to keep the pits open longer, said funding the managed closure did not make economic or environmental sense but “only made sense as a vindictive act to get rid of the British coal industry.”

General secretary Chris Kitchen, who was speaking from employee-owned Hatfield Colliery near Doncaster, which will be the country’s last deep pit mine, said: “My belief is that the current Government is hoping to complete what the Thatcher Government started 30 years ago.”

Two weeks ago the NUM provided a £4m loan to Hatfield to keep it open for 18 months. The union believes state aid, which would prevent British power stations being reliant on foreign coal, could keep Kellingley and Thoresby open until 2018, and together the three pits could provide coal for up to 20 years.

Mr Kitchen added: “These pits have demonstrated that they can make a profit, even under the spectre of unemployment.

“Now we have until the end of next year to try to extend the life of the pit.”

The NUM also blasted the time it had taken to secure the deal, as UK Coal first approached the Government for support in December last year. The company announced the closure plan in April, and in July, plans for an employee buy-out which could have kept the pit open until 2020, were shelved.

In total, UK Coal has secured £20m in funding, mainly from the private sector, to fund the closure of pits. Spokesman Andrew Mackintosh said the day was one of “mixed emotions”, but the finance deal was critical to avoid insolvency and “the immediate collapse of the business.”

Over the last three years, the company has made mass redundancies as it struggled to stay afloat.

Mr Mackintosh told The Yorkshire Post the deal signalled “the end of UK Coal”, but did not prevent fresh investment in the company, “even at this late stage.”

Energy minister Matthew Hancock, echoed his comments, and said the deal was “meticulous” in its design so that it would not compromise the possibility of future investment.

A managed closure was “in the best interests of the taxpayer and employees” amid a sharp fall in global coal prices, he said.

“I will continue to work with the company and unions and am personally committed to doing all we reasonably can to support the remaining deep coal pits, subject to getting value for money for taxpayers,” he added.

Shadow Home Secretary, Yvette Cooper, whose constituency neighbours Kellingley, urged the Government to go through with earlier pledges that they were prepared to approach Europe for support to keep the Kellingley open.

“They haven’t done the work and they’ve been concentrating on the closure deal instead,” she said.“They need to put a plan to Europe urgently to get extra help - because if they don’t it will be clear they have been stringing people along from the start.”