UK Coal asks for help after mine fire

UK COAL chief executive Kevin McCullough has revealed that Friday’s fire in its Daw Mill mine may pose a threat to the company.
UK Coal asks for help after mine fire UK Coal asks for help after mine fire UK Coal asks for help after mine fire UK Coal asks for help after mine fire UK Coal asks for help after mine fire

Daw Mill mine, courtesy UK Coal

Staff Reporter

"There's a very, very slim chance that this mine will re-open. We don't want to give miners there false hope. Similar fires in Britain's mines have led to permanent closures,” McCullough told The Telegraph.

"Our other mines are economically viable, but the company as a whole won't be viable if the cost burden from a fire at Daw Mill has to be shouldered by the company alone," he said.

“Taking an unexpected hit of that order of magnitude is a very difficult thing for the company to stand. We will need help from government.”

UK Coal will meet with John Hayes, the Energy Minister, to discuss the future of the company's operations this week, McCullough said.

It employs almost half of Britain's 6000 coal miners and is one of the last in the country's once-mighty coal industry, which was privatized in 1994.

Daw Mill produced 0.8 million tonnes in the six months to June 30, about a quarter of UK Coal's output.

"Daw Mill was UK Coal's mainstay asset, but also its most troublesome asset, both operationally and in terms of labour relations. The fire may, unfortunately, be the death knell for it, at least in its current structure," Investec Securities said in a note.

The mining company has been vigorously cutting costs at Daw Mill and already reduced headcount there.

The company, dogged by loans and losses, avoided an imminent debt default and the closure of operations after completing a major debt restructuring with shareholders in December.

The fire broke out at 3.30pm (GMT) on Friday and rapidly took over the tailgate area of the mine.

Over 100 miners were safely evacuated and a core team remains to keep the situation under control and achieve an orderly shutdown of operations.

It is unclear why the fire broke out, but the company said all parts of the mine were regularly inspected by the UK Health and Safety Executive.

The section of the mine affected was inspected just two days before the fire.