UK Coal is appealing for urgent financial help, which it says is required to keep its mines open.
The coal mining firm said it is working with the UK Government, as well as private investors, to raise at least £10 million. According to the company, it is in “advanced talks” to raise the amount.
Company spokesperson, Andrew Mackintosh, said the firm was “very confident” of being able to achieve the target level of funding and find a long-term investor in the business.
UK Coal operates eight mines across England, employing 2000 people.
The company currently owns two working deep underground mines – Thorseby in Nottinghamshire and Kellingley in Yorkshire.
It also has opencast mines operating in Northumberland, County Durham, Derbyshire, Shropshire, and Leicestershire, with six more sites proposed across the UK.
Mackintosh said that the mining company’s most recent financial problems were caused by falling prices in the global coal market, which exacerbated the cost of the fire at the Daw Mill coal mine in Warwickshire.
Last year, the firm said it had entered administration as a result of the fire, which subsequently closed the midlands’ coal mine.
Mackintosh added: “"We do need that investment, It is important for the future. There are difficult days ahead but at the moment everything's looking positive as far as discussions are concerned. We have got to make sure discussions are completed soon so we can start talking about where we go from here."
BBC Business correspondent, Joe Lynam, said: “ That UK Coal could face administration twice in as many years is testament to the flimsy margins on which coal producers operate these days.”
“Whereas last year a huge fire at the company's Daw Mill plant pushed it into administration, this year UK coal faces a double whammy of issues beyond its control.
Coal is priced in dollars and even though UK Coal only sells locally, the recent rise in Sterling has made their produce more expensive. On top of that the global price of coal has fallen thanks in part to an abundance of shale gas in the US,” Lynam explained.
“Both these factors could be enough to push the company to the edge - assuming of course that an imminent deal to secure fresh investment falls through,” he said.
Despite the firm’s difficulties, there remains an estimated £80 million of coal under the ground at Thorseby coal mine alone. Of this, supporters of UK Coal have said that there is clearly financial incentive for investment in the company.
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/31032014/uk_coal_needs_new_investment_670/
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