Coal boss calls for long-term policy

NEIL CLARKE, chairman of British Coal, yesterday launched a thinly-veiled attack on government attempts to stem the decline of the coal industry, warning against short-term solutions that would plunge the industry into crisis again within a few years and make it difficult for British Coal to be privatised.

The Government is trying to negotiate a five-year deal with National Power and PowerGen to agree extra sales of coal, so saving some of the 31 deep mines threatened with closure. However, Mr Clarke called for an additional longer-term solution that would give the company a 'robust and sustainable' future.

Speaking at a coal industry lunch in London, he said: 'It is only by confirmation of the situation beyond 1998 that we can be assured that our efforts to transform this business are not wasted; that the light is indeed at the end of the tunnel, and not just a gas- fired express heading ever more rapidly towards us.'

Securing a sustainable market for coal beyond 1998 would have a 'fundamental impact' on the potential for privatising the coal industry.

Mr Clarke has repeatedly asked for a radical solution to coal's problems. This would include such measures as cutting down on the dash for gas in electricity generation and scaling back on nuclear power and oil-based orimulsion. However, British Coal management is understood to be increasingly frustrated at the Government's apparent unwillingness to intervene in this way to expand the coal market.

Mr Clarke said: 'The market situation facing us is difficult; certainly worse than I, or anyone, anticipated it would be when I became chairman.'

He added that unless an extra market could be found, the 'painful reality' would be the closure of profitable coal mines.

The Government appears to have reached stalemate in its negotiations with National Power and PowerGen over sales of extra coal. The generators have offered to buy about 40 million tonnes extra over five years but are being pressed to take more. Ministers are worried that 40 million tonnes will fail to save more than a handful of mines - which would be unacceptable to backbench rebels.

The stalemate means plans to publish a White Paper on energy policy and the coal industry's future have already slipped badly. Hopes that the issue could be resolved at a cabinet meeting this week will almost certainly be dashed.