Failed coal producer owes millions to North East organisations

The collapse of Britain’s biggest coal producer has left local authorities and many North East companies out of pocket to the tune of £5m

The collapse of Britain’s biggest coal producer has left local authorities and many North East companies out of pocket to the tune of £5m.

Some local businesses who were owed money following the demise of UK Coal are facing a deficit running into millions of pounds.

They include Durham-based Hargreaves Services which is owed more than £1.3m, according to a list of creditors produced by UK Coal’s administrators, PricewaterhouseCoopers.

The specialist bulk haulier is among 30 other companies that are owed money by UK Coal, with more than six companies owed in excess of £30,000.

These include M.J. Hickey Plant Hire in Morpeth and Sunderland-based Joy Mining Machinery.

Other creditors include Northumberland Council, which is owed more than £621,000 and Durham Council which is owed £181,500.

A spokesman for Northumberland Council confirmed that UK Coal owed the council £621,192 in national non-domestic rates. The council is working with the administrators to recover this amount.

Steven Mason, corporate director of finance at Northumberland County Council, said: “We will be working with the administrators in the hope that we can recover the sums owed to us, which include national non-domestic rates.”

UK Coal, which operates three sites in the region, announced in July that two of its companies had gone into administration.

UK Coal Mine Holdings and UK Coal Operations’ assets are now held in individual companies owned by a new business, UK Coal Production.

The restructuring plans have seen the remaining mines taken over with the backing of Britain’s pension rescue scheme, The Pension Protection Fund (PPF).

The British coal industry has struggled to break even in recent years because of rising costs, hefty pension liabilities and competition from cheap imports.

In the North East, UK Coal employs more than 200 staff at opencast mines in Butterwell, near Morpeth, Potland Burn, near Ashington and Park Wall North, near Crook in Durham.

A UK Coal spokesman said the administration of UK Coal followed a devastating fire that closed the Daw Mill deep mine in Warwickshire.

The spokesman added: “Production of coal from Daw Mill represented around a third of UK Coal Operations’ revenue and the forced closure of the mine had threatened the ongoing viability of the remaining two deep mines and six surface mines.

“A compromise with major creditors was agreed which enabled the viable mining operations at two deep mines, and the six surface mines, to successfully restructure and secure 2,000 jobs.

“As part of the restructuring, many difficult decisions had to be taken but this was the best outcome possible to preserve any of the business and save jobs.”

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