UK’s biggest coal mine faces closure

MINING group UK Coal is consulting on closing Britain’s biggest pit under wider plans to restructure the business, jeopardising hundreds of jobs.

The firm is considering closing Daw Mill near Coventry by early 2014 when current coal panels will have been exhausted and has stopped work to extend production beyond then.

UK Coal is a major supplier to Britain’s coal-fired power stations from three deep mines and six surface mines.

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It said yesterday that Daw Mill had considerable long-term resources but production is 175,000 tonnes behind budget.

The company returned to profit earlier this year for the first time in four years but chairman Jonson Cox recently said Daw Mill was the greatest risk to output this year due to a change in the coal face.

The pit has been dogged by productivity problems in recent years, including a four-month gap in production which cost it £75 million two years ago.

UK Coal recently agreed a deal with unions which included a two-year pay freeze and a new shift system.

But with production having failed to hit targets, UK Coal announced that it would carry out a review over the mine’s future.

It said it wants to ensure that financial uncertainty at Daw Mill does not impact on the rest of its business, which includes the two other deep mines at Thoresby in Nottinghamshire and Kellingley in North Yorkshire.

Former miners’ union leader Arthur Scargill recently visited the Daw Mill site to urge workers at the pit to hold their ground and fight for their rights.

UK Coal swung from an interim loss of £93.2m to a profit of £22.1m in the six months to June as revenues jumped more than 80 per cent to £256m and average prices rose by 20 per cent.

UK Coal had posted losses totalling £270m over the previous three years due to persistent production problems.