MPs' figures on coal challenged

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THE TRADE and Industry Select Committee's proposals for coal could increase British Coal's market by no more than 8 million tonnes - or possibly not at all - according to Neil Clarke, the company's chairman. Industry sources say that at 8 million tonnes, 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 tonnes (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 tonnes of coal, much of which could be replaced by subsidised UK coal, but British Coal believes imports will be only 8 million tonnes. The company also said the committee has underestimated the amount of gas-fired plant to come onstream 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 said: 'The consequences for us could be very serious indeed. This is especially the case if rival fuels are allowed to command an ever larger market while efforts to replace coal are limited largely to displacing imports.' He 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'.

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. In a ballot, 556 workers voted for strike action, with 356 against.