Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Some 650 workers are at risk of losing their jobs after the UK Coal Mine Holdings announced earlier today they are closing down the Daw Mill colliery in Warwickshire, England following a fire deep into the coal mine that continues to burn “ferociously” to this day.
In a statement, Chief Executive Kevin McCullough said the past week has been terrible for “not just for the company and its employees but also for the energy security of the country” as production from the said mine halted due to a fire that broke out on 22nd February and still continues to this day at 740 metres deep despite cutting ventilation to prevent oxygen from getting into the deep mine.
The fire ignited 540 metres deep into the ground and eight kilometres away from the bottom of the main shaft, parent company Coalfield Resources plc (LSE:CRES) said last 25th February.
No one had been hurt or died during the incident, which the company assured to be of no risk or impact to the residents close to the site.
However, as a result, about 650 jobs at the said mine are declared redundant with only a small core team to remain to secure the mine in the succeeding months, the company said, as the company decided to close the mine after nearly 50 years of production.
“We are now exploring the possible transfer of some colleagues to our other mines. Regrettably however, this news is likely to see the majority of the Daw Mill workforce being made redundant and our thoughts and best wishes are with these colleagues and their families at this difficult time,” McCullough stated.
Early Closure
Closing the Daw Mill mine had been considered a year ago as the then UK Coal plc suffered huge debt and pension deficit, saved only by a restructuring programme that split the company’s operations into a property and mining divisions, the latter being freed from debt.
The newly restructured business, now named Coalfield Resources plc, holds 33% voting rights and owns 90% economic rights to the mines operated by UK Coal Mines Holdings, subordinated only to the provision for the pension fund deficit.
The Daw Mill, one of the three deep mines of the company, is the largest coal mine in the UK capable of producing until 2028 with about 56 million tonnes of coal still in place.
Troubles at the said mine resulted in production behind target, had earlier initiated talks for potential closure by 2014.
The company is yet to release its full year results for 2012 but its first six months last year saw a loss of £20.6 million, in contrast with a profit £58 million profit in 2011, and is expected to end the year at a loss.
Shares of Coalfield Resources were at 4.60 pence at 9:25 GMT, valuing the company at £3.72 million.
UK Coal is the largest coal mining company in the UK supplying about five percent of the country’s electricity needs.
