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CORRECTED-UK Coal starts business closure with CEO departure
May 30, 2014 / 2:01 PM / 4 years ago

CORRECTED-UK Coal starts business closure with CEO departure

(Deletes 4th paragraph reference to four board members expected to resign)

LONDON, May 30 (Reuters) - UK Coal, Britain’s largest coal producer, has started the gradual closure of its loss-making business by parting ways with its chief executive officer, the company said.

Kevin McCullough, brought in to help restructure the firm in early 2013, resigned last week.

“There will be various changes at all levels in the company and it is right that those changes should start at the top,” said a spokesman for UK Coal.

Representation on a new board has not been finalised but it is it is envisaged that it will include its investors as well as existing UK Coal employees and will be announced following completion of the deal, the spokesman said.

The company was placed into administration last year after it struggled to contain rising costs, pay hefty pension liabilities and compete with cheaper imports from countries like Columbia and Russia.

Since then, the business has fallen deeper into financial trouble as competition intensified from cheap coal displaced by the U.S. shale gas boom.

To help the business, whose two deep coal mines employ around 1,300 people, wind down its operations in a controlled way over 18 months, the government, coal producer Hargreaves Services and Harworth Estates are set to give UK Coal a combined loan of around 20 million pounds.

UK Coal said on Friday it will next week begin individual redundancy consultations with nearly 300 employees at its deep mines in Thoresby in Nottinghamshire and Kellingley in Yorkshire and at its head office in Harworth near Sheffield.

“No one will be made compulsory redundant until the end of their notice period,” the UK Coal spokesman said.

Britain’s coal industry was at the heart of its economic growth in the early 20th century when it employed around 1.2 million people at nearly 3,000 collieries.

Since then, competition from cheaper producers and greener energy alternatives has taken its toll.

Last year, British coal production fell to its lowest in at least 15 years at 12.8 million tonnes, less than a third of what was still being produced in the late 1990s. (Reporting by Karolin Schaps; editing by Stephen Addison)

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