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Kellingley and Thoresby deep mines 'managed closure' Kellingley and Thoresby deep mines to hit 1,300 jobs
(35 minutes later)
Two coal mines will be subjected to a "managed closure" as the government backs them for just 18 months. Two deep pits are to close next year with the loss of 1,300 jobs after the government revealed it is loaning UK Coal £10m for "managed closure".
UK Coal is consulting on plans to close pits at Kellingley, North Yorkshire, and Thoresby, Nottinghamshire, with the loss of about 1,300 jobs. UK Coal plans to close the pits at Kellingley, North Yorkshire, and Thoresby, Nottinghamshire.
Business Minister Michael Fallon said taxpayers would face "significant losses and liabilities" in the event of immediate insolvency of UK Coal. Business Minister Michael Fallon said the taxpayer would face "significant losses and liabilities" in the event of UK Coal's immediate insolvency.
The government is offering a loan of £10m to cover the closure period. Unions have not yet commented on the announcement.
In a written statement to Parliament, Mr Fallon said: "There is no value for money case for a level of investment that would keep the deep mines open beyond this managed wind-down period to Autumn 2015."
'Unique situation'
Immediate insolvency, he said, would mean significant losses and liabilities relating to "redundancy and unpaid tax liabilities".
"Considering this, the taxpayer is better served by supporting a managed closure of the mines," said Mr Fallon.
The proposal, which ministers have been considering since 21 March, would see the two deep pits face a phased shutdown and UK Coal's six surface mines being sold off.
Mr Fallon said the government's agreement to participate was subject to final terms "that provide adequate protection to taxpayers" as well as assurance of backing from all parties, including the trade unions.
He said a "rapid response service" would be available to help employees try to find new work and retrain.
Mr Fallon said the directors of UK Coal had approached the government at the end of January to report that a falling coal price, exchange rates and other factors meant that "the viability of the business was potentially in doubt".
It is understood that private sector investment will come from rival mining group Hargreaves Services and Harworth Estates, landlord of the two mines.
Mr Fallon said in a separate statement: "We are doing everything we can to help in this unique situation."