UK Coal seeking £20 million to avoid insolvency

UK Coal could be forced to close two of Britain’s three last remaining deep mines as the company stands on the brink of insolvency.

It was revealed on Wednesday (2 April) that pits could be shut at Kellingley Colliery in Yorkshire and Thoresby Colliery in Nottinghamshire. The mines employ 700 and 600 people respectively and were told this week that they could be closed in the near future as UK Coal cannot afford to keep them in operation.

UK Coal is the UK’s largest coal producer but needs to raise £20 million of investment within the next few weeks to secure its future. Both the Government – who needs to provide half the total amount – and the private sector have been approached to find the finances.

If a bailout is secured then a managed closure of the deep mines could be negotiated over an 18-month period. However, if the funds are not found over the coming weeks then the pits “will be closed imminently”, with 1,300 jobs being lost in the process, the BBC reports.

UK Coal, which provides eight per cent of the total coal consumed in the UK, stated that the company had been struggling as the strong pound had meant it was cheaper to import the resource from other markets, particularly the US.

If the two mines had to close, 30 years on from the miners' strikes, the employee-owned Hatfield Colliery in South Yorkshire would become Britain's last remaining deep mine.

There was cause for some optimism, however, as the Financial Times announced today (4 April) that “Jon Moulton, the veteran turnaround investor, has expressed interest in buying parts of UK Coal as two of the last three deep pits in the country face closure”.

_____________________________________________________________________
Related information:
Coalfield Resources bounces back after insolvency
Funding your acquisition

Share this article

Latest Businesses for Sale

View more businesses for sale