Struggling Hatfield Colliery has been handed a £4 million lifeline by the National Union of Mineworkers.
The employee owned pit has been given the bail out aimed at extending the life of the mine - the last remaining operational pit in South Yorkshire and set to be the last remaining deep mine in Britain following the closure of Kellingley and Thoresby colleries next year.
The NUM has agreed to invest the money in the business by providing a commercial loan which will be repaid within a year.
The cash will provide important bridging funds to the colliery to start mining the next coalface within weeks.
The coalface, which has been developed over the last year has a life of 18 months.
John Grogan, Chair of Hatfield Employee Benefit Trust, which operates the mine under the Hatfield Colliery Partnership umbrella: “I am delighted that the National Union of Mineworkers have stepped up to the mark and joined our other commercial partner Hargreaves who have provided valuable support to the mine over the last year. The NUM’s decision to provide us with a loan is a vote of confidence in the mine and particularly the nearly 500 people who earn their living here. It is also an important boost to the 220 companies in our supply chain who supply goods and services to Hatfield. What we need now is for the coal fired power generators and the Government to step up to the mark too.”
Doncaster North MP and Labour leader Ed Miliband welcomed the NUM’s intervention and said: “Hatfield is now the last operational pit in South Yorkshire, so it is vitally important that efforts are made to preserve it and save the jobs of the people employed there and the jobs it helps to create at companies who supply the pit.”
He added: “I don’t want Doncaster’s coal heritage to be lost.”
Mr Miliband has been involved in a series of meetings to secure the future of the pit following 70 job losses there last autumn.
The colliery was forced to axe dozens of workers after a plan to change shift patterns to increase productiviity proved unsuccessful and bosses agreed to switch back to previous working patterns.
The pit now intends to negotiate new contracts with the major coal fired power generators - Drax, EDF, EON and Scottish and Southern - this autumn.
Added Mr Grogan: “World coal prices are expected to rise in the coming years. To fund future development work going forwardwe need the stability of long term contracts with the generators. If each of the Big 4 coal fired power generators took a quarter of our annual million tonnes a year of output they would probably be paying a maximum premium of about £2 million each compared with current world market prices. For that they would
be getting a valuable hedge against future price hikes in world prices or political instability in the main countries we import coal from which are Russia and Columbia. In terms of Corporate Social Responsibility
“We are delighted that the European Union and the British Government are committed to building the nation’s first clean coal fired power station at Drax due to be ready in 2020.
“It would be ironic if despite the fact that we have up to 40 million tonnes of reserves of coal at Hatfield the proposed clean coal plant at Drax made possible by the taxpayer ended up burning only Columbian coal and Russian coal. We will be seeking political backing from all parties in our efforts to secure these contracts.”
However, the colliery has also agreed to make more savings by cutting 600 lorry journeys a week from the pit.
Mr Grogan said: “This innovative scheme is a win win for both the colliery and the local community. We save money that can be reinvested in the mine and local residents will no longer have to endure the inconvenience of the additional traffic on local roads.”
Mayor of Doncaster, Ros Jones said: “As Mayor of Doncaster, I am delighted that the National Union of Mineworkers is investing in Hatfield Colliery Partnership to ensure they continue mining coal.
I am also delighted that up to 600 lorry movements per week may no longer be required, which is not only good for the environment, but also saves money and assists with the viability of the pit.”
Mr Grogan concluded: “The granting of the loan by the National Union of Mineworkers has given us time to make the case to the generators and to Government that the last deep coal mine in the country not to announce its closure deserves a future. We owe it to all those who have gone before us not to go quietly into the good night.”