Union tipped for choice pits

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THE Union of Democratic Mineworkers and the former commercial director of British Coal, Malcolm Edwards, are favourites to take over the most valuable slice of the privatised coal industry, writes David Bowen. The Government is expected to decide in the next two weeks which of the 18 companies bidding for five regional coal companies, worth about pounds 800m, will be successful. However, an announcement may not be made until after the Tory conference, which finishes on 14 October.

'Everyone thinks Malcolm Edwards will be given Central South,' said David Price, editor of the newsletter, Coal UK. Mr Edwards, who now runs Coal Investments, has linked up with the UDM, which dominates the Nottinghamshire pits that form the core of the region.

Mr Price believes Central South will fetch about pounds 270m. The next most valuable company is Central North, which includes the Yorkshire pits and the Selby complex and has a price tag of up to pounds 240m. Observers believe the winner will be either RJB Mining, which is bidding for all five companies, or Northern Mining, a management buyout.

The strongest bidders for the North East, the industry believes, are RJB and a joint venture between the Ryan mining group and British Alcan, which operates an aluminium smelter next to the Ellington mine, which has been closed but is likely to reopen. The company is likely to be worth pounds 100m.

The Scottish region has lost some of its appeal, as companies have seen cost problems with the only deep mine, Longannet. Mr Price says it is worth between pounds 20m and pounds 40m, with a consortium of Coal Investments, the Scottish NUM and a group of business leaders likely to fight it out with the Scotcoal management buyout. Wales, which has no deep mines, has proved most popular, with at least seven groups bidding for its opencast anthracite mines. They include Ryan, Taylor Woodrow and a Wimpey/Powell Duffryn joint venture. The region is expected to raise up to pounds 180m.

(Photograph omitted)