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Closing UK coal mines will cost more than keeping them open

World Coal,

Coalition government plans to close two of the UK’s last remaining coal mines have been criticised by trade unions, who claim the decision will cost more than keeping the mines open.

Plans for a managed closure of the Kellingly and Thoresby underground mines owned by UK Coal will put 1300 miners onto state welfare benefits and jobseeker’s allowance.

Union officials said this was “madness”, and would leave a £75 million vacuum in the public purse from income tax and national insurance payments lost between 2016 and 2018, while taxpayers would be forced to cover the cost of unemployment benefits for redundant workers.

A new report “Merits of UK Coal State Aid Application”, commissioned by the Trades Union Congress (TUC) said that using state aid to keep the coal mines open until at least 2018 would be cost neutral. The report showed that investment of up to £74 million would be easily covered by the £86 million in extra profits expected to be made during this period on top of regular revenues of £500 million.

Following the report’s guidelines would also allow the UK to reduce dependence on imported Russian coal, according to the TUC.

The two coal mines would also have the prospect of longer term viability, as carbon capture storage (CCS) technology reduces the environmental cost of coal-fires power generation.

TUC general secretary, Frances O’Grady, said it was clear coal-mining in Britain had a future if the government wanted it to.  “Recent events in the Ukraine should have made clear the importance of having a secure domestic energy supply,” she said. 

“Instead the government is allowing two of Britain’s three remaining coal mines to close, causing the unnecessary loss of 1300 skilled jobs and leaving us even more exposed to fluctuations in the price of imported coal.”

The TUC also pointed out that in Germany, Spain, the Czech Republic, Poland, Hungary, Romania, Slovenia and Slovakia, coal mines have received state aid when faced with tough times.

O’Grady concluded “It would madness to allow the closure of British mines when countries like Germany and Spain are using far greater amounts of state aid to bolster their own domestic coal supply.”

 Director of CoalPro, the UK Coal Producers’ Association, Phil Garner said: “There is a strong case for the UK government to provide financial aid to our remaining underground coal mines. 

“This would maintain access to significant coal reserves, ensure that the employees continued in work and provide additional security of supply of fuel. If we are to develop CCS projects it would be ironic if there were no indigenous coal to supply them. Market prices will change and UK production can help to ensure that consumers are not exposed to coal price spikes in the future.”

Written by Sam Dodson

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