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Loan for doomed UK coal mine

World Coal,

The doomed Hatfield coal mine in South Yorkshire, UK, has received a £8 million loan to help it keep to its scheduled closure date of May 2016.

The Hatfield coal mine will be the UK’s last underground coal mine.

500 jobs are set to be lost when the mine closes.

The two other remaining deep coalmines in Britain, Kellingley in Yorkshire and Thoresby in Nottinghamshire, are to close in October 2015.

The UK government agreed to provide a commercial loan to the Hatfield Colliery Partnership, to help the business close and avoid immediate insolvency.

"The government has agreed to provide a short-term commercial loan of 8 million pounds ($12.10 million) to support the company's managed closure plan," said Britain's Energy Minister, Matthew Hancock, in a statement.

The Hatfield Colliery Partnership approached the government for financial support in November 2014 after a combination of weak coal prices, unfavourable exchange rates and production problems made the business unprofitable.

The National Union of Mineworkers (NUM) stepped in with a £4 million loan to help the colliery in September but those funds were insufficient to keep the business afloat.

The government's loan, a first £2 million tranche of which was paid on 31 December, will buy the parties time to negotiate a further loan if necessary to keep the mine open until 2016, Hancock said.

Fierce competition from cheaper markets, such as Colombia, Russia and the US, falling domestic demand and a government drive away from carbon-intensive coal power generation have contributed to the decline of coal mining in Britain.

Unions and mineworkers have expressed dismay at the current state of affairs in the British coal industry. They point out that the UK already imports over 40 million tpy of coal – enough to support 20 underground coal mines and at least 10,000 mining jobs.

NUM general secretary, Chris Kitchen, condemned the economic and environmental madness of transporting coal thousands of miles to Britain, while at least 200 years of British coal reserves lie untouched.

“The next elected government will oversee the completion of what Margaret Thatcher started 30 years ago — the destruction of Britain’s deep coalmining industry,” he said.

Thatcher is often vilified by unions and those in old coal mining areas in the UK, for her role in introducing the neoliberal style of capitalism, which, with its deregulation and raft of privatisation, contributed to the global recession of 2007 and 2008.

As the late Labour MP, Tony Benn, said of Thatcher: “Her policy was to reverse the trends in modern politics that were made possible by the trade unions being legalised. She decided to eradicate the power of the unions, undermine local government and privatise assets […] it was a major attack on democracy.”

The UK's coal industry has been in terminal decline since Thatcher's conservative party came to power in 1979.

“We have got three pits but we cannot get the investment to keep them open,” Kitchen said.

“It makes no sense — no economic sense, no environmental sense, no common sense. Clean coal technology will go ahead but it will not be British coal being burned,’ he added.

“Now the Tories are prepared to finance the closure of our last deep coalmines, but they are not prepared to finance keeping them open. It is madness,” Kitchen said.

One ray of hope in the British coal mining industry lies in the New Crofton Co-operative Colliery project, which proposes to open a new drift coal mine just to the south of New Crofton. The mine will be owned and operated by a workers Co-operative, New Crofton Co-op Colliery Ltd (NCCC).

NCCC say the new coal mine could provide 50 sustainable mining jobs for around 20 years. 

Written by Sam Dodson

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