BRITISH COAL, due to be privatised by the end of 1994, cut its losses from pounds 588m to pounds 238m last year despite the closure of 22 pits and a 25,000 reduction in its workforce.
The company said this would be the last set of results before privatisation, but companies bidding for British Coal said they would be demanding a further financial progress report by the year-end.
'These figures show the good work being done to reshape the company,' said a director at one private mining company. 'But BC wants to put the best gloss on the figures, and we will be wanting to see if they are hiding anything.'
Private firms will want to know the size of liabilities they might have to take on, thought to be about pounds 600m. The rest of the costs, about pounds 1.5bn, will be borne by the taxpayer.
British Coal made operating profits of pounds 186m in the year to March, compared with pounds 520m, according to the annual report published yesterday. There are now 16 working pits employing 8,000 miners, compared with 50 pits and 40,000 miners in October 1992 when the closure programme began.
Neil Clarke, chairman, said: 'Our results for the year reflect the provisions and charges resulting from capacity reduction. But for our continuing collieries to have the chance of a sustainable future, it was a price which had to be paid.'
The industry had been forced to balance supply and demand when contracts from the British electricity generating companies fell from 65 million tonnes to 30 million tonnes, he said.
British Coal will be sold with a price tag of pounds 750m, about pounds 500m from mining operations and pounds 250m from non-core businesses such as fuel distribution. The sale has attracted 33 applications from companies or management teams for one or more of the five regions or for separate, mothballed pits.
Mr Clarke said he believed British Coal had won almost all of the available additional sales to the electricity generators without using subsidies offered by the Government. But the market for coal remained tough, with extra competition from private companies that have leased seven former BC pits over the past year.
Productivity had increased 38 per cent to an average of 8.76 tonnes a work-shift, reaching a record of 14.6 tonnes a shift in recent weeks.
Keeping collieries open on a care and maintenance basis while talks proceeded with private firms had cost over pounds 70m. 'These collieries have been kept in production longer than the market would have dictated. The cost has been high,' Mr Clarke said.
Exceptional items totalled pounds 305m, down from pounds 996m. Operating profits in deep mines was pounds 66m over the year, compared with pounds 341m, while opencast mines contributed pounds 80m, against pounds 160m.
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