Six deep mines threatened as minister reviews coal subsidy

Up to six pits – a third of Britain's remaining deep coal mines – are under threat of closure after the Energy minister, Brian Wilson, indicated yesterday that the Government would not renew a subsidy scheme for the industry.

About £120m in aid has been pumped into uneconomic pits over the past year under a European Union-approved scheme to cover operating losses until the industry's prospects improve. But the scheme, which runs out in July, is not expected to be rolled over.

Speaking to a gathering of senior coal executives in London, Mr Wilson said: "It is not the business of the Government to prop this industry up for a few months in an opportunistic way in order to win a few favourable headlines."

Mr Wilson also highlighted several ways in which the outlook for the coal industry had got better. New electricity trading arrangements had benefited coal-fired power stations, the lifting of the moratorium on gas-fired power stations had not resulted in a renewed "dash for gas" and international coal prices had risen.

Senior coal industry sources, nevertheless, fear that five or six pits might now be vulnerable, putting 3,000 to 4,000 jobs in jeopardy. Among those pits most at risk is the Prince of Wales colliery in West Yorkshire, which is in the Pontefract and Castleford constituency of the junior health minister, Yvette Cooper. A meeting is taking place today to discuss a report into the future of the pit carried out by its owner, UK Coal.

UK Coal issued a veiled profits warning hinting at further pit closures last November. The company said: "The long-term viability of the deep mine business continues to be examined." It added that UK Coal was "reviewing those operations where geological or other uncertainties increase the risk of uneconomic production".

UK Coal, which operates 10 of Britain's 17 remaining deep mines, has received about £75m of the subsidies provided by the Government in the last 12 months.