British Coal sale shows book loss of pounds 300m

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Industrial Correspondent

The Government made a book loss of pounds 300m on the sale of the coal mining industry, according to figures in British Coal's annual report and accounts.

The company values the assets transferred to successor coal companies at pounds 1.26bn compared with about pounds 950m paid by those who bought the mines.

The sale of the industry was completed at the turn of the year, with almost the entire English coalfields going to RJB Mining for pounds 815m.

Neil Clarke, chairman of British Coal, said: "I must underline that this was an open market sale and the market decided the price. The value they [the Government] received was decided by competitive bidding process." A spokeswoman for the Department of Trade and Industry said: "The price the Government got exceeded all expectations."

It also emerged yesterday that Mr Clarke, whose contract was due to expire at the end of the year, has agreed to remain for a further six months on a part-time basis.

British Coal is still selling the non-mining assets, which include fuel distribution businesses, a vast property portfolio and CINMan, the pension fund management subsidiary that oversees the investment of pounds 16bn on behalf of clients. Yesterday the company announced that CINMan's venture capital arm, CINVen, was to be offered for sale separately.

British Coal made an operating profit of pounds 118m before pounds 51m exceptional items in nine months of trading last year compared with pounds 186m in the whole of 1993/94.

British Coal sales under contract with the generators fell 25 per cent during the year to 30 million tonnes. The profit per tonne of coal produced at deep mines almost doubled to pounds 2.90.