Outlook is bleak, warns coal boss

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PRIVATE coal companies face a difficult future because of the clout of National Power and PowerGen, according to Neil Clarke, the chairman of British Coal. He said an imbalance of market power between coal suppliers and the two large generators would remain whatever the structure of the privatised industry, and that the coal companies' position in negotiating sales would inevitably be weak.

Speaking before the Trade and Industry Select Committee, Mr Clarke said there must be concern over what might happen when existing contracts with National Power and PowerGen expire in 1998. 'It is fundamentally about whether there will be a sustainable market at that time.'

In the run-up to the Government's privatisation of British Coal, Mr Clarke painted one of the gloomiest pictures yet of the industry's future and ruled out any hope that exports might make up for coal's loss of market share in the UK. 'In the absence of a radical transformation of the market, the prospects for coal have got worse. We have to accept that inexorably the market has changed and we can see no prospect of it changing significantly in favour of UK coal.'

Mr Clarke added that subsidies promised by the Government for extra coal sales are subject to a series of constraints.

British Coal has 22 deep mines in operation, compared with 50 in October 1992, and is expected to announce more closures in the next few weeks. Over the same period 24,700 miners and industrial staff have left the industry.

The Government plans to sell British Coal in up to five regional packages and is hoping that the Bill to privatise the company will complete its passage through Parliament by the middle of the year.