UK Coal, Britain's biggest coal miner, is in talks with creditors to stay solvent and save up to 2,000 jobs amid claims its could go into voluntary liquidation after a blaze forced the company's largest mine to close.
When a huge fire at the Daw Mill colliery in north Warwickshire forced its closure in February, putting 600 miners out of work, UK Coal warned the shutdown could damage the whole company's ability to survive unless it received help from the Government, or creditors.
The miner's spokesman Andrew Mackintosh this week told the Financial Times that the company had lost £100m of equipment, £160m of coal and incurred £35m in costs in the Daw Mill fire, and suggested that the firm had proposed voluntary liquidation. That would involve handing over its remaining mines, which include some of the UK's last deep mines – Kellingsley in North Yorkshire and Thoresby in Nottinghamshire – as well as six open-cast mines in north and central England – to a new company.
But yesterday UK Coal issued a statement saying: "We remain positive that we have an underlying profitable business." Kevin McCullough, the chief executive, added: "I hope we are close to securing a way forward for our remaining mines. There will undoubtedly be some difficult decisions as we have had to look at all possible options."
A voluntary liquidation would be likely to see UK Coal transfer its staff to a new company, safeguarding pension rights, but meaning creditors received only an estimated 32p in the pound. The main losers of a voluntary liquidation would be the energy generators that had prepaid for coal, including EDF, Drax, SSE and Eon.
UK Coal's demise would also spark more concerns about Britain's energy supplies, as the company's operations yield 7.3 million tonnes of coal a year, which provide 5 per cent of the UK's electricity.
Scottish Coal went into liquidation last month with the loss of almost 600 jobs. Hargreaves Services, one of the UK's biggest coal producers, mothballed the Maltby mine near Rotherham last year with the loss of 500 jobs.
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