Nearly six hundred jobs have been canned at six mines in Scotland as Scottish Coal went into administration, it was announced on Friday.
KPMG announced the job losses at the mining company as it took over the liquidation process. 142 employees have been kept on to help secure the sites.
The closure will come as little surprise to some as coal plants in the UK have been struggling to compete with cheap foreign coal, especially because international coal prices are so low.
In March earlier this year the National Union of Mineworkers warned cheap coal imports were putting 450 jobs at risk. Just over a month ago two coal mines closed.
Over the weekend the union said it wants to work with KPMG and other parties to keep as many jobs as possible going forward, adding: “This is the third blow to the Coal Mining Industry in the UK this year following on from the closure of Maltby Colliery in Yorkshire and the Daw Mill Mine in Warwickshire and takes the UK one step closer to being reliant on imported coal for our future energy needs.”
KPMG said it had been left “with no other option” but to make the redundancies. Blair Nimmo, Joint Provisional Liquidator and Head of Restructuring at KPMG in Scotland said: “In light of Scottish Coal’s poor trading and financial position, we have had to cease trading with immediate effect.”
Much of the firm’s focus will be on whether equipment such as plant machinery can be sold or whether they can find a buyer for the whole company.
Mr Nimmo went on: “It is still possible that mining operations will continue and offer future employment prospects for at least some of the people who have lost their jobs”.
Formed when British Coal was privatised, Scottish Coal operates six open cast coal mines in Scotland, located in East Ayrshire, South Lanarkshire and Fife. Together with the plant operator, CPL, the business employed a total of 732 people.
Scottish Energy Minister Fergus Ewing said the priority was to make sure mining operations go on and jobs are preserved: “This is very disappointing news and our immediate concerns are for the workforce and their families. We have been working closely with the company and the coal sector over the past year and have sought to provide all support that is within our power to do.”
But a campaign group which is opposed to open-cast mining – which removes coal from the Earth’s surface in an open pit – said it was a “good thing” operations have stopped at the mines.
Oliver Munnion, a member of Coal Action Scotland told ELN: “Many communities living next to them [will be] happy to see the back of Scottish coal operations but it’s a shame so many of the open cast workers were laid off.”
The group believes workers should be compensated with the insurance bonds which it says were a legal obligation for open-cast coal mines built in Scotland. Effectively the bonds are agreed by insurance companies acting on behalf of banks and insure the mine for each stage of the process and at some points during the mine’s operation can be worth a few million pounds. This option has not yet been put on the table, said Mr Munnion.
A representative for KPMG said it was “still early bells” for that sort of thing, adding the firm was giving workers as much help as they needed including a telephone helpline and employment advice.