Labour hits at pit closures

The Labour Party has called on the government-owned Coal Authority to halt planned closures of three mines, at a cost of nearly pounds 10m to the taxpayer, in order to save almost a third of the UK's accessed coal reserves.

The demand follows the handing over, at midday on Friday, of the Keresley mine near Coventry to the authority by Arthur Andersen, administrators to Coal Investments, the country's second largest coal group after privatisation in 1994.

The move came after the accountants failed to attract a firm bid in the five months since CI crashed with pounds 50m of debts in February.

Keresley joins Markham Main, near Doncaster, and Hem Heath, in Stoke- on-Trent - which used to employ 700 of CI's 1,400 miners in all - in being kept on a "care and maintenance" basis while last-ditch salvation attempts continue.

CI's troubles will be far from the last to confront the industry, which employed 250,000 people just 20 years ago but, in the wake of privatisation, only employs around 10,000 today.

RJB Mining, which bought the bulk of British Coal, faces threats to several of its 20 mines when overpriced contracts with National Power and PowerGen run out in March, 1998. This will be a key test of policy for any incoming Labour government.

Low-cost North Sea gas, which is even cheaper than imported coal but has a less than 50-year life, has increased the pressure as generators switch from coal-fired plants.

"We've got to start looking strategically at coal. If we close these pits now, we could shut off reserves. We must keep them open on care and maintenance," the Labour shadow energy spokesman, John Battle, said this weekend.

"It's no use telling us when the gas has run out that we should have kept them open."

This weekend the Coal Authority said three possible buyers had emerged for Markham Main, including a buy-out attempt by former manager Jonathan Oxby. All have been given until 9 August to come up with a firm bid, otherwise the pit - with 50 million tonnes of reserves - will close.

Former manager Mick Morton is also still attempting to buy Hem Heath, which has more than 100 million tonnes underground.

At Keresley, a vast mine with some 300 million tonnes, a slender thread of hope comes with interest from Richard Chadwick, who runs open-cast mining operations in Australia.

Mr Chadwick left the former National Coal Board in the early 1970s, moving into open-cast mining in South Africa. He then became managing director of BP Coal and Italy's Agip coal, until the oil giants sold out.

A blunt, no-nonsense miner in his 50s, he is understood to have made an unsuccessful bid for British Coal's South Wales interests at privatisation.

This weekend, former CI chief, Malcolm Edwards, criticised UK administration procedures which, far from reshaping troubled firms as intended, act as a "slow motion receivership".

He also joined Labour's calls to keep the pits open.

The Coal Authority, the residuary licensing and safety body, dismissed the demands, pleading lack of resources. "Someone would have to fund it. We do not have the funding," a spokesman said.