Coal 'should be sold as one unit'

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The Independent Online
THE GOVERNMENT should privatise British Coal as a single entity to allow it to compete effectively in the marketplace, says Richard Budge, chief executive of RJB Mining, the coal company floated on the stock market last year, writes Mary Fagan.

Mr Budge, whose company is a potential bidder for British Coal, warned that the industry faced enough threats from gas and from coal imports without the injection of competition into the domestic market place.

RJB yesterday announced a 22.9 per cent increase in interim pre-tax profits to pounds 6.82m. Turnover rose almost 30 per cent to pounds 49m, helped by the acquisition in March of the Monckton Coke and Chemical Company.

RJB is one of more than 25 companies to have pre-qualified to bid for all or part of British Coal, which the Government plans to privatise in up to five regional packages. The company is expected to bid for all five, although no decision will be taken until near the 14 September deadline.

RJB has already taken over the operation of three mines under lease and licence from British Coal. Of these, Calverton and Clipstone in Nottinghamshire are moving towards full production, and Rossington in Yorkshire will begin production towards the end of the year. The company has doubled its workforce to about 2,000 over the past year. The majority of new employees are miners, although some are Monckton staff.

RJB, which also operates opencast mines under licence from British Coal, said total production for the half-year was 1.33 million tonnes compared with 980,000 in the first half of last year.

Mr Budge said the company was confident of the outlook for the future. It was competitive with British Coal's best, despite the fact that it operated relatively old mines.

Earnings per share were 10.9p compared with a pro forma 11p. The interim dividend is 5.2p compared with 5p at the same time last year.

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