The UK’s coal industry will halve in size next year without political intervention, RJB Mining is expected to tell the Government this week.
Richard Budge, chairman of RJB Mining, the UK’s largest coal producer is expected to give evidence to the Commons Industry Committee this week on threats to the industry.
An RJB spokesman said that on the strength of the contracts signed with Eastern Generation and National Power – and the expected deal with PowerGen – the company should sell 16 million tonnes to UK power generators in 1998 – compared with 27 million tonnes in 1997. He confirmed that this drop would put five to eight collieries and 5,000 jobs in jeopardy.
RJB’s position has hardened in recent weeks, as hopes have dimmed that it could sell substantial volumes over the next three years on top of the long-term contracts with the generators.
The strong pound has hit efforts to develop export markets and made imports more attractive. It has also become clear that any further short-term call from generators would be minimal and would depend on a particularly cold winter.
RJB’s shift in stance is seen by many as an attempt to put pressure on the Government to intervene to secure it additional contracts – through an imposition on the generators to increase their coal stocks. It is probably the only suggestion that would secure relief within the necessary time-frame. promotion of clean coal technology would take several years to translate into significant orders.
However, energy minister John Battle has insisted the Government will not act to tilt the market in coal’s favour.
The offer by Midland Mining – which took over two of the six mines operated by the failed Coal Investments – to look at buying any pits closed by RJB is unlikely to provide salvation, despite claims that it could produce cheaper coal (by paying lower wages).
Jim Sorbie, Midland’s founder, stressed his interest would be conditional on there being a market for the coal and this is now far more the issue than price.