UK Coal goes into administration
10 July 2013
UK Coal, the country's biggest coal miner was yesterday put into administration after it was forced to close its most profitable mine at Daw Mill colliery last March due to an underground fire.
The two administrators, PricewaterhouseCoopers and BDO LLP, have separated out the viable operations of the group and agreed a compromise with major creditors, including the Industry Wide Pension Funds, which will see the pension schemes transfer to the Pension Protection Fund in due course.
The viable mining operations have been successfully restructured and their assets will now be held in individual companies owned by a new business which will operate as UK Coal Production Ltd.
The restructuring will see eight mines of UK Coal merged into a new company called UK Coal Production Limited and will run as an employee trust.
The deal will save 2,000 jobs, but will cut miners' pensions and 350 jobs will be lost at Daw Mill and transfer 120 to other mines.
Kevin McCullough, CEO of UK Coal, said, ''Today is very much a day of mixed emotions, but this is the best outcome that it was possible to achieve.
''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.
''Along with all of my colleagues, I look forward to working with our customers and suppliers as we rebuild the business following the disastrous fire.''
UK Coal Production Ltd is the largest producer of coal in the UK and supplies around 4 per cent of the country's energy needs.
Following the privatisation of the UK coal mining industry in 1994, UK Coal acquired some of British Coal's former mines and today operates two deep mines and six surface mines.
Its deep mines produce over 3.2 million tonnes of coal per year, while its surface mines produce around 1.8 million tonnes.