Double blow clobbers UK Coal

UK COAL, currently seeking Government aid to safeguard 4,000 mining jobs and access more than 100m tonnes of coal, has been hit by foreign competition and the strength of sterling.

The company, which controls 95% of the deep mines in the UK, lifted coal sales volumes 3% to 9.9m tonnes in the six months ended June. But competition and sterling cut its income by 6%.

It is applying for aid worth £79m to keep deep coal mining going in the UK. But the Department of Trade and Industry has set a limit of £60m of aid under the Investment Grant Aid Scheme outlined in the recent Energy Review White Paper.

Drift mining production at places such as Selby slipped to 1.8m tonnes against 2.2m tonnes in the same period last year.

UK Coal wants to open more deep mines as environmental considerations are making it tougher to win planning permission for opencast mining. Local authorities have authorised no new opencast pits during the past six months.

UK Coal is now more of a property play, selling off old mines and worked-out opencast sites. At the interim stage, it had sold £8.3m worth of property against only £1.1m previously. It is carrying out a review of its property portfolio, which was valued last year at £174m.

The Gloucester Coal interest it owns in Australia is up for sale, though it has received no firm offers yet.