The Queen's Speech: Coal industry: Early start for pits privatisation Bill

A BILL on the privatisation of beleaguered British Coal could be introduced as early as next week with a view to becoming law in the middle of next year.

It emerges amid the apparent acceleration of the closure of many of the company's deep mines in the face of the trend towards the use of nuclear power and natural gas in the electricity generating market. There is growing speculation that only 12 to 15 deep pits - up to half the current total - will be left to privatise.

The Bill will implement the Government's proposals to sell off British Coal in up to five regional packages. Discussions with potential bidders are likely to begin early next year.

The Bill will establish a Nottinghamshire-based body which will be in charge of licensing all mining activity, so that any British Coal regulatory and mining responsibilities are in future kept apart.

The Bill will also provide for the protection of third parties including anyone affected by issues such as subsidence in coalmining areas. It will also set out the future of British Coal's pension funds, valued at around pounds 14bn and it will include changes in working practices, primarily to relax the rules for private mining firms. At present, these companies may not employ more than 150 men underground at any one time.

Ministers have said that they aim to make safety a priority in the sale and to privatise the largest possible economically viable coal industry. However they now admit that the market outlook for coal is worse now than when the Government issued a white paper on the coal industry at the beginning of the year.

Within the last few weeks, British Coal has proposed to close three of 12 mines which were 'reprieved' following the white paper. The expected demise of the pits - Bentley, Frickley and Hatfield in South Yorkshire - will mean the loss of 1,450 jobs.

A meeting on the future of another 'reprieved' mine, Silverdale in Staffordshire, is due to be held today and could result in closure with the loss of 400 jobs. British Coal has also begun moves that could lead to the closure of Littleton Colliery in Staffordshire, which employs almost 600 men and is one of British Coal's 'core' of 19 supposedly safe mines.