The property to be sold includes 110,000 acres of agricultural land housing 2,000 tenant farmers. Much of the land was acquired in the 1970s for opencast mining but a fall in coal prices made mining the reserves uneconomic. British Coal said it would give preference to tenants but would otherwise divide the land - which also includes woodland - into regional packages and offer them for sale.
British Coal will also offer 800 houses with their freeholds, again giving preference to tenants. The third and final part of the portfolio comprises 13,000 acres of land with buildings. It includes 200 sites covering 9,000 acres, which British Coal believes to be ripe for industrial and commercial development. The bulk of this land is in Scotland, Yorkshire and the East Midlands.
Ray Proctor, British Coal's finance director and director of privatisation, said the sale would begin in the spring and be completed over the following 12 months. He declined to give any estimate of the potential revenues. However, he said British Coal would retain the right to claw back money from purchasers in some circumstances where planning consent may subsequently increase the value of land.
So far British Coal has sold only small non-mining subsidiaries. Coal Products, the smokeless fuel and industrial coke arm, is about to be sold to a management buyout team for an estimated £70m. British Coal is still discussing the future of Cinman, the pension fund, which has £16bn under management. The company is also poised to dispose of British Fuels, a large fuels distribution company with a turnover of £600m, and has yet to decide the future of the job creation and venture fund business, British Coal Enterprise.
Mr Proctor said the rump of British Coal would be largely wound up by the year end and that his own contract would expire in the summer.