UK Coal to close Selby with 5,000 job losses

UK Coal is tomorrow expected to announce the closure of Britain's biggest mining complex with the loss of up to 5,000 jobs.

Formerly seen as the "jewel in the crown" of the industry, the decision to shut the Selby complex in north Yorkshire will take another massive bite out of the remnants of the British coal business and could have a crippling effect on local communities.

To sweeten the pill the Chancellor of the Exchequer, Gordon Brown, is expected to announce an aid package for British miners thought to be in the region of £40m. Both UK Coal and the union had been fighting for considerably more. The company is likely to extend its redundancy terms of up to £27,000 a miner.

The shutdown of three separate pits in the complex – Riccall, Stillingfleet and Wistow – will lead to the loss of more than 2,000 jobs directly, but will have a substantial knock-on impact on related industries, blowing an estimated £420m hole in the local economy.

The announcement comes on top of the closure next month of the Prince of Wales pit in west Yorkshire – the oldest mine in Britain – and Clipstone colliery in Nottinghamshire, which is due to shut early next year.

Taken together the closures will mean the loss of about a third of Britain's deep mining industry. The Ellington colliery in Northumberland is also thought to be at risk.

Steve Kemp of the National Union of Mineworkers (NUM) described the decision to close the Selby complex as "ludicrous" arguing that millions of tonnes of coal were left at the site which would be sufficient to keep the mine open for another 30 or 40 years. "This amounts to further butchery of the industry. It is the economics of the madhouse. We are importing millions of tonnes of coal and the amount is ever-increasing."

Mr Kemp, who is taking over as national secretary of the union at the end of the month when Arthur Scargill retires, said the NUM would demand meetings with ministers as part of a campaign to keep the pits open.

Sources at UK Coal, the company which took over most of the industry when it was privatised, said the complex would not finally close for another 18 months or so, giving time for pitmen to look for other jobs and for "regeneration" measures to take effect.

Management argues that the closures are made necessary by huge losses. The three pits in the Selby complex last year incurred a combined loss of £35m. The group as a whole sustained a £26.5m deficit compared with £17.8m profit in 2000 despite receiving £21.7m in subsidies and enjoying higher coal prices and increased production levels.

The decision to close Selby was taken on the basis of two expert reports, one by the independent consultants IMC and another by the Department of Trade and Industry. Both argue that while there are considerable reserves left, geological conditions mean they cannot be extracted economically. Two other pits in the Selby complex were closed in the late 1990s.

The industry has shrunk dramatically since the year-long miners strike in 1984-85. Since then the membership of the NUM has slumped from 208,000 to about 4,000 or so now. The number of deep mine pits in Britain has decreased from 170 to 16 of which 13 are owned by UK Coal.