UK Coal starts closure with CEO loss

 

UK Coal, Britain’s largest coal producer, has started the gradual closure of its loss-making business by parting ways with its chief executive officer.

Kevin McCullough, brought in to help restructure the firm in early 2013, resigned last week. “There will be various changes at all levels in the company and it is right that those changes should start at the top,” a spokesman for UK Coal said.

Representation on a new board has not been finalised but it is envisaged that it will include its investors as well as existing UK Coal employees and will be announced following completion of the deal, the spokesman said.

The company was placed into administration last year after it struggled to contain rising costs, pay hefty pension liabilities and compete with cheaper imports from countries like Columbia and Russia.

Since then, the business has fallen deeper into financial trouble as competition intensified from cheap coal displaced by the US shale gas boom.

To help the business, whose two deep coal mines employ around 1,300 people, wind down its operations in a controlled way over 18 months, the Government, coal producer Hargreaves Services and Harworth Estates are set to give UK Coal a combined loan of about £20m.

UK Coal said on Friday it will next week begin individual redundancy consultations with nearly 300 employees at its deep mines in Thoresby in Nottinghamshire and Kellingley in Yorkshire and at its head office in Harworth near Sheffield.

Last year, UK coal production fell to its lowest in at least 15 years at 12.8 million tonnes, less than a third of what was still being produced in the late 1990s.

Reuters

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