US conglomerate Renco will be obliged to keep open all RJB Mining’s 13 collieries for at least 3-4 years if it goes ahead with a planned £130m acquisition of the beleaguered British coal group.
While RJB will still notconfirm the name of the suitor it has been in discussions with for months, a source close to the talks said preserving the status quo in terms of pits and personnel for this period would be a condition of the takeover.
Renco is still conducting due diligence investigations, and no announcement is expected until the European Commission rules on the UK government’s proposed £100m aid package to the industry – about £70m of which would go to RJB. The deadline for the EC decison is 26 October.
RJB took over 80% of the British Coal industry in 1990. It still employs around 8,000, although it closed three pits and laid off thousands of contractors over the period. It agreed to keep open two more mines earmarked for closure, Ellington in Northumberland and Coitstone in Notts, pending the outcome of the government’s aid initiative.
The company has secure contracts with coal-fired electricity generators for its output over the next three years but still made a £10.2m loss in the first half of 2000. A spokesman said it hoped to ‘at least claw this back’ in the second half of the year.