UK Coal pensions cut will save North East miners' jobs

UK Coal revealed last night that 2,000 jobs are expected to be saved after the company agreed a deal with the Pension Protection Fund

UK Coal's surface mine at Potland Burn in Ashington
UK Coal's surface mine at Potland Burn in Ashington

Opencast miners in the North East have been told to take a pension cut to save their jobs.

Concern had been growing that UK Coal would have to sell up or close sites after the Government turned down pleas for a crisis loan.

The firm, which has three sites in the region, faced collapse after a fire at a Midlands mine blasted a hole in plans to restructure a growing pensions blackhole.

Last night the firm revealed it expected to save 2,000 jobs after agreeing a deal with the Pension Protection Fund.

But while those who have already retired will see their pension protected, others have been told they face a 10% cut in order to make the deal workable.

Some 350 jobs will go also as a result of the closure of Daw Mill Colliery in Warwickshire.

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.

As a result of the Daw Mill fire, both UK Coal Mine Holdings Ltd and UK Coal Operations Ltd have gone into administration.

The viable mining operations, including the sites in the North East, 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.

Kevin McCullough, chief executive of UK Coal, said: “This 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’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.”

The company lost �100m of equipment and �160m of coal and ran up �35m in costs as a result of the Warwickshire fire earlier this year.

Energy minister Michael Fallon praised the “tremendous effort” put into the UK Coal rescue deal.

He added: “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.

“In addition, the Job Centre Plus-led Rapid Response Service will provide help to the community.”

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