April 3, 2014 / 9:08 AM / 6 years ago

Cameron promises to help save UK coal producer

LONDON (Reuters) - The British government will do everything it can to help save the country’s biggest coal producer, UK Coal, which is planning to close two of the nation’s last three deep pit mines, Prime Minister David Cameron said on Thursday.

A hard hat lies on top of a coal seam at UK Coal's Cutacre surface mine near Bolton, northern England, April 16, 2008. REUTERS/Phil Noble

The coal miner went into administration last year after struggling to break even due to rising costs, hefty pension liabilities and strong competition from cheaper imports.

On Wednesday it started redundancy consultations with staff at its collieries in Thoresby in Nottinghamshire and Kellingley in Yorkshire which employ 1,300 of the company’s 2,000 staff.

“If there are things we can do, bridging finance we can make available, then we will look at that very, very closely,” Cameron told BBC television.

He said negotiations were ongoing but added that there were limits to spending taxpayers’ money on saving businesses.

The government also said it was engaging with the European Commission, the European Union’s executive whose competition department verifies members’ state aid schemes.

The closure of the two mines will leave Hatfield Colliery in South Yorkshire as Britain’s last remaining open pit mine.

Last year 280 UK Coal employees lost their jobs when its largest coal mine at Daw Mill shut down after being crippled by a fire.

UK Coal administrator PwC declined to comment and UK Coal was not immediately available for comment.

In 2012, UK Coal produced over a third of Britain’s domestic coal supply but its operations have been increasingly under pressure from international competition.

Britain’s coal-fired power plants were producing around 40 percent of its electricity on Thursday, grid operator data showed.

Reporting by Karolin Schaps and Guy Faulconbridge, Editing by Belinda Goldsmith

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