Released March 27, 2013 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The ailing U.K. coal sector has been struck another blow as Scottish Coal (Alloa, Clackmannanshire) has announced that hundreds of jobs will have to go at a number of opencast mines across Scotland.
The company admitted that up to 450 jobs - around 60% of its workforce - will have to be axed as the company struggles to survive. It has blamed high operating costs and the continued low price of international coal imports for the situation. Scottish Coal, which is part of Scottish Resources Group, told workers in a presentation that "continued depression of the international coal price has led to coal sales contracts with generators being uneconomic".
At least two mines will be shut in the coming weeks. The decision will also affect a number of mines due to be worked to a close in the 2013/14 financial period. These include Dunstonhill near Patna, Dalfad near Muirkirk and parts of the House of Water complex between New Cumnock and Dalmellington. The company has also withdrawn an application for a new opencast mine called Benbain Remainder, near Dalmellington, for the second time.
The news comes just weeks after a major fire led to the closure of Daw Mill Colliery in Warwickshire, the largest deep coal mine still operating in the U.K., with the loss of up to 650 jobs. The owner, UK Coal (Doncaster, England), said the fire was the largest seen in a U.K. coal mine in over 30 years and that it "continues to burn ferociously at a depth of 740 meters with no signs of it reducing". For additional information, see August 21, 2013, article - Daw Mill Coal Mine Shutting Down.
A few months earlier, Hargreaves Services announced it was mothballing the Maltby Colliery, near Rotherham, with the loss of 540 jobs. The owner claimed that despite being in operation for more than 100 years, the mine was no longer viable on safety, geological or financial grounds. The pit will be shut permanently at the end of this month.
Scottish Coal said it has no plans to open any new mines at the moment until the restructuring is completed and market conditions improve.
"A number of mines are due to reach their planned limits of production this year," a spokesman told media in a statement. "While a number of new sites have either been given planning permission or are currently awaiting a decision, they will be not commenced immediately. As a result, there will be a temporary reduction in productive capacity until the new sites are commercially viable."
He added: "Coal still consistently provides between 40% and 50% of the U.K.'s electricity needs and demand remains high. However, Scottish mined coal is priced in relation to global pricing trends which have been at record low levels. This is mainly due to a massive expansion of 'fracked' shale gas in America, which has displaced their coal onto the international market. We do, however, expect prices to continue to rise which will allow companies like SRG to re-establish former levels of production. And despite current challenges, the long-term future for U.K. coal production looks very positive."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The company admitted that up to 450 jobs - around 60% of its workforce - will have to be axed as the company struggles to survive. It has blamed high operating costs and the continued low price of international coal imports for the situation. Scottish Coal, which is part of Scottish Resources Group, told workers in a presentation that "continued depression of the international coal price has led to coal sales contracts with generators being uneconomic".
At least two mines will be shut in the coming weeks. The decision will also affect a number of mines due to be worked to a close in the 2013/14 financial period. These include Dunstonhill near Patna, Dalfad near Muirkirk and parts of the House of Water complex between New Cumnock and Dalmellington. The company has also withdrawn an application for a new opencast mine called Benbain Remainder, near Dalmellington, for the second time.
The news comes just weeks after a major fire led to the closure of Daw Mill Colliery in Warwickshire, the largest deep coal mine still operating in the U.K., with the loss of up to 650 jobs. The owner, UK Coal (Doncaster, England), said the fire was the largest seen in a U.K. coal mine in over 30 years and that it "continues to burn ferociously at a depth of 740 meters with no signs of it reducing". For additional information, see August 21, 2013, article - Daw Mill Coal Mine Shutting Down.
A few months earlier, Hargreaves Services announced it was mothballing the Maltby Colliery, near Rotherham, with the loss of 540 jobs. The owner claimed that despite being in operation for more than 100 years, the mine was no longer viable on safety, geological or financial grounds. The pit will be shut permanently at the end of this month.
Scottish Coal said it has no plans to open any new mines at the moment until the restructuring is completed and market conditions improve.
"A number of mines are due to reach their planned limits of production this year," a spokesman told media in a statement. "While a number of new sites have either been given planning permission or are currently awaiting a decision, they will be not commenced immediately. As a result, there will be a temporary reduction in productive capacity until the new sites are commercially viable."
He added: "Coal still consistently provides between 40% and 50% of the U.K.'s electricity needs and demand remains high. However, Scottish mined coal is priced in relation to global pricing trends which have been at record low levels. This is mainly due to a massive expansion of 'fracked' shale gas in America, which has displaced their coal onto the international market. We do, however, expect prices to continue to rise which will allow companies like SRG to re-establish former levels of production. And despite current challenges, the long-term future for U.K. coal production looks very positive."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
