Government in crisis: Textbook business that is rewarded with closure: Martin Whitfield on a Staffordshire colliery which faces closure despite its economic viability

SILVERDALE colliery, near Newcastle-under-Lyme, Staffordshire, will make a profit of more than pounds 9m this year. It produces coal at pounds 28 a ton and can provide cheaper power station fuel than either imported fuel or North Sea gas. It faces closure next year.

'If we were anything but a pit, we would have the Queen's Award for Industry,' Ken Leech, 47, the colliery manager, said. 'We are making a return on capital employed that the City would go doolally over.'

Silverdale, expected output 1.1 million tons for this year compared to 935,000 last year, is one of the 21 pits given a temporary stay of execution by Michael Heseltine, President of the Board of Trade.

The colliery and its 700 miners have a bleak future, despite being able to produce coal at a third below next year's electricity contract price. It will be blocked up and abandoned, leaving millions of pounds-worth of equipment inside.

The miners, together with 1,500 from nearby Trentham colliery, will swell the dole queues around Stoke-on-Trent.

Mr Leech admits to being stunned by the closure announcement. He cannot understand the logic of the shutdown. Silverdale has been profitable every year for as far back as anyone can remember. The mine continues to generate more than enough cash for its own capital requirements.

It is the heart of its community. National First Aid awards line Mr Leech's office. Charity runs, parachute jumps and outings for OAPs show how important a pit becomes.

Every day, Silverdale's coal leaves the pit on four trains to Fiddlers' Ferry power station, near Warrington. The pit is not one of those building up coal on the surface. There is less than a week's stock on the ground.

'Fiddlers' Ferry can be supplied by us at prices below imported coal. It is far less expensive than gas,' Mr Leech said.

Imported coal delivered to Garston, Merseyside, where PowerGen has built a new coal terminal, costs about pounds 36 a ton.

Productivity at Silverdale has improved from five tons per man- shift in 1986 to 7.13 tons as the miners drive their way 1,000 metres (3,281 feet) beneath Keele service station on the M6.

A two-year-old investment of pounds 25m is just beginning to pay itself back, leaving Silverdale with the prospect of cheaper output.

'It is like a textbook business plan. A good business with an investment bulge which is now entering a run of low-cost production,' Mr Leech said.

The pit has been virtually rebuilt since new drifts were opened into the Keele fault in 1976. High sulphur production is due to be replaced by less environmentally damaging low-sulphur coal in seams to be reached in 12 to 18 months.

The coal is produced at between pounds 1.10 and pounds 1.15 a gigajoule, compared to the British Coal contract price with the generating companies of pounds 1.85. Next year's contract is pounds 1.50. Silverdale's coal competes with opencast production in terms of price.

Mr Leech said there was at least 30 years of accessible reserves (50 million tonnes) without the need for major investment.

The workforce has been praised for its high output. Today workers leaving for the TUC's demonstration in London are being covered by others doing double shifts so that production is not lost.

Miners at the pit were the first to use the techniques of Advanced Technology Mining and doubled productivity on moving to new seams and faces.

Roy Allbutt, 41, the local branch secretary of the National Union of Mineworkers, has been at the pit since leaving school at 15.

'When I started 26 years ago it was on a closure list. But they had faith in the workforce and we have made it one of the top pits in Britain.

'My first manager used to say about the pits around here, 'There are 20 nationalised pits and then there is Silverdale'.

'This government doesn't want any miners left in this country. Nothing else makes sense because the economics certainly don't. We have produced the goods and have been kicked in the teeth.'

(Photograph omitted)