British Coal chief challenges figures on sales increase

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The Independent Online
THE TRADE and Industry Select Committee's proposals for coal could increase British Coal's market by up to 8 million tons - or possibly by nothing at all, according to Neil Clarke, the company's chairman.

Industry sources say that at 8 million tons, only five or six of the 31 pits at risk are likely to be saved.

The committee's report envisaged expanding the market for British Coal by up to 19 million tons (16 million of which would be sold to the electricity industry). The main route to extra sales would be replacing coal imports with subsidised UK coal.

British Coal disagrees with key assumptions underlying the committee's solution, in particular the expected levels of coal imports. Its surprise announcement is also effectively an attack on the Government's plans for the market, which are understood to rely heavily on replacing coal imports.

The committee assumed that within a few years, the UK would be importing 24 million tons of coal, much of which could be replaced by subsidised UK coal, but British Coal believes imports will be only 8 million tons. The company also said the committee had underestimated the amount of gas-fired plant to come on stream over the next few years, displacing coal. Furthermore, British Coal doubts whether imports of electricity from France can be stopped and is more pessimistic than the committee about the overall growth in electricity demand.

Mr CLarke also warned that if the issues of gas and nuclear power are not addressed by the Government 'we will be much closer to the base tonnages which were so much in our minds in October'.

The Government has given the go-ahead for a pounds 250m gas terminal in North Wales that could create 3,000 construction jobs.

However, the project is under threat because the Department of Trade and Industry has yet to approve a gas-fired power plant at Connah's Quay, which is the only customer for the gas, while the National Union of Mineworkers says that Connah's Quay could cut the market for coal by 4 million tons a year.

The Welsh Office has approved the building of the terminal at Point of Ayr - where one of the 31 threatened pits is - by Hamilton Oil of the US. The American company and its partners have found oil and gas off the coast of North Wales. They estimate the development could produce 50,000 barrels of oil a day and huge amounts of gas. So far, however, PowerGen, which owns Connah's Quay, is the only customer and the deal falls through if the DTI fails to approve the power plant.

As well as creating 3,000 jobs, the project could throw a lifeline to the Cammell Laird shipyard at Birkenhead. Union officials hope the scheme will provide orders for oil platforms and pipework.

The issue underlines the Government's dilemma over the 30,000 threatened coal jobs. Almost every solution to the problem of pit closures involves the loss of jobs - or lack of job creation - in other industries.

NUM members at Ellington colliery in Northumberland, the only pit in the North-east not threatened by closure, are poised to go on 24-hour strikes over British Coal's plan to contract out more development work.

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