County Durham coal mining and transport company Hargreaves Services plc has described the closure of UK Coal as a “sombre day” for the industry and confirmed it is assisting the firm in the process.
The Government has decided there is no case for investment to keep two of the last three sites open in the long term.
Ministers have agreed to a £10m loan, alongside £10m from the private sector, to support the “managed closure” of the UK Coal mines at Kellingley in North Yorkshire and Thoresby in Nottinghamshire, as well as a sale of surface mines in Northumberland, Shropshire, County Durham, Derbyshire and Leicestershire.
Together the sites employ 1,300 people and they are to be wound down by autumn 2015.
Hargreaves Services plc has confirmed that it is working closely with Government and key stakeholders with the intention of providing marketing and operational support on commercial terms, including the provision of a £5m secured loan.
Gordon Banham, CEO of Hargreaves, said: “The planned closure of UK Coal marks a sombre day for the UK’s coal industry.
“We, alongside Government and other stakeholders, feel a responsibility to support a well-managed and respectful wind-down of UK Coal’s operations, which employ around 2,000 people.
“In addition to the proposed £5m loan, we would assist in the marketing of UK Coal stocks and provide a range of support services.”
The Government backing spares the company the prospect of immediate insolvency which would have cost the Treasury “significant losses and liabilities” from redundancies and unpaid taxes.
In a written statement to MPs, energy minister Michael Fallon said: “The taxpayer is better served by supporting a managed closure of the mines.
“However, deep coal mining remains an inherently risky business.
“There is no value for money case for a level of investment that would keep the deep mines open beyond this managed wind-down period to autumn 2015.
“Private sector investors who wish to put in the substantial investment that would be needed to maintain the mines beyond autumn 2015 without government support remain free to do so.”