UK Coal said today it had saved 2000 jobs after completing a restructuring plan in the wake of March’s Daw Mill fire.
The company’s future had been under threat after the blaze which closed the Daw deep Mill mine earlier this year – production from which represented a third of UK Coal’s revenue.
The fire took the best part of three months to put out, and left UK Coal with a potential £300million bill – more than half of which was for the coal itself – along with a £500million pension deficit.
Both UK Coal Mine Holdings and UK Coal Operations have gone into administration as part of the restructuring, which has seen the viable parts of the company transferred to individual companies owned by a new firm, UK Coal Production Ltd.
David Kelly, Rob Hebenton and Ian Green from PwC have been appointed administrators of the companies, with Graham Newton and Paul Bates of BDO LLP also appointed joint administrators of Mining Services.
More than 100 of the Daw Mill workers will transfer to the new company and work in other mines, but 350 face losing their jobs.
“Today is very much a day of mixed emotions, but this is the best outcome that it was possible to achieve,” said UK Coal chief execuitve Kevin McCullough.
“Entering administration and the subsequent restructuring was the only way we could preserve any of the business and while I’m delighted we’ve saved 2,000 jobs, we’ve also had to make some very difficult decisions.
“I’m pleased that we managed to transfer 120 of our Daw Mill colleagues to our other mines following the fire. Our thoughts today also rest with the 350 colleagues who will now, regrettably, be made redundant as a result of Daw Mill closing.
“I’d like to thank everyone that has helped us reach this position, which would not have been possible without the support of the Pension Protection Fund, our customers, suppliers, all parts of Government, our employees and their families and trade unions.
“It means that this country can still produce coal on a reasonable scale. It may be a small industry, but when 40% of our energy still comes from coal it makes absolute sense to use as much British coal as possible to help keep energy bills from being even higher.”
UK Coal still has deep mines in Yorkshire and Nottinghamshire, along with six surface mines in England.
Administrators for the companies agreed a compromise with creditors which will see pension schemes transfer to the Pension Protection Fund to secure jobs and protection on accrued benefits.
“The restructuring announced by PwC today should secure more than 2,000 jobs and put the company on a stable footing for the future,” said Energy Minister Michael Fallon.
“Our priority now must be to continue to support former Daw Mill workers into employment as soon as possible.
“The Government will ensure workers receive their full statutory redundancy payments through the Redundancy Payments Service. In addition, the Job Centre Plus-led Rapid Response Service will provide help to the community.”
