Hargreaves Services lends 5m pounds to help wind down UK Coal

10th Apr 2014 16:22

UK miner Hargreaves Services is providing a 5m pounds loan to support the wind-down of rival UK Coal.Hargreaves is lending the cash as part of a package of private sector help to shut two deep pits at Kellingley, North Yorkshire, and Thoresby in Nottinghamshire.Harworth Estates, the property arm of Coalfield Resources, which gave up control of UK Coal to a staff benefit trust in December 2012, is also involved.Hargreaves said it was working closely with the British government and major stakeholders to provide marketing and operational support on commercial terms.Chief Executive Gordon Banham said: "In addition to the proposed £5m loan, we would assist in marketing UK Coal stocks and providing a range of support."The government said on Thursday it was also giving UK Coal a £10m loan to help fund the closure in the next 18 months of the pits, which employ about 1,300 people.The loan is needed to prevent UK Coal from slipping into insolvency which would cause "significant losses and liabilities" for British taxpayers, Minister of State for Energy Michael Fallon said.The coal miner entered administration last year after facing rising costs, big pension liabilities and competition from cheap imports.The government backing means the company will be able to carry out a managed closure of its deep operational mines by autumn 2015 and seek a buyer for its surface mines, the statement said.UK Coal also owns six operational, smaller surface mines in north-east England, Derbyshire, Leicestershire and Shropshire, which will be sold.PW