Closure of Daw Mill mine near Coventry over pay and working practices dispute threatens 800 jobs
UK Coal has threatened to shut Britain’s largest coal mine, jeopardising 800 jobs, if it cannot reach an agreement with unions on pay and new shift patterns. The Union of Democratic Mineworkers (UDM) said it hoped that workers could meet new production targets to save the mine.
Britain’s largest coal-mining company has begun a consultation over a proposal to close its Daw Mill mine in Arley near Coventry in early 2014, and briefed workers on Wednesday.
The move comes just three months after the company reached a deal with the UDM and the National Union of Mineworkers which included a two-year pay freeze and a new shift system. Together with the closure of its final-salary pension scheme for the 3,000-strong workforce, the deal agreed in December was expected to keep labour costs per head at 2010-levels to the end of 2013. A new, less favourable final-salary pension scheme started at the beginning of the year.
UK Coal, which bought British Coal’s main mining assets after the privatisation of the state mining company in 1994, blamed “limited unofficial action” by miners at the Warwickshire colliery, along with geological flaws, for a major production shortfall. The pit has been dogged by productivity problems in recent years, including a four-month gap in production which cost it £75m two years ago.
The company said: “It has reached a critical point. The company can’t afford to keep running Daw Mill as it is.
“The mine is at risk but the company will not be put at risk by a single pit … This company is not in good shape. We are ringfencing each mine and Daw Mill has been the poorest performer.”
UK Coal said the miners at Daw Mill were being asked to work the same shift patterns to which workers at the firm’s other deep mines, Thoresby in Nottinghamshire and Knottingley in Yorkshire, had already agreed.
Jeffrey Wood, the UDM’s president, struck a conciliatory note and said he hoped miners could work through the geological disturbance on a new coal face – dirt and loose mud which is forcing them to build a timber structure to make the pit safe – within the next month.
He acknowledged that the mine was only producing 20,000 tonnes of coal a week, half the company’s target, but believed the target was “achievable” once the geological problem had been sorted out. “We have to put aside any differences we may have, it’s no good blaming each other,” he said. “The only way is for everyone to pull together. There is light at the end of the tunnel.”
The coal seam at Daw Mill is five metres thick, some 750 metres below the ground, and UK Coal says on its website that it could continue to produce resources until 2028. Daw Mill is the only remaining pit in a region that used to have dozens of deep mines, employing thousands of miners.
Former miners’ union leader Arthur Scargill recently visited the colliery to urge workers to hold their ground and fight for their rights. However, the union, worried that the production shortfall at Daw Mill could also bring down Thoresby and Knottingley with thousands more job losses, is keen to work with the company to secure the future of the mine.
Doncaster-based UK Coal also has six surface mines. All of its other operations are performing in line with expectations, but Daw Mill is around 175,000 tonnes behind budget.
Last April the company admitted it had “deep-rooted problems,” having slumped to a loss of nearly £130m for the second year in a row. It has since returned to profit, for the first time in four years, but its executive chairman, Jonson Cox, who took over in November 2010 and vowed to carry out a complete overhaul of strategy, recently said Daw Mill remained its biggest problem.
New managers and leaders for each coal face at Daw Mill have been appointed under the supervision of Gareth Williams, the managing director of mining.
UK Coal is also in talks with its main lender, Lloyds Banking Group, and hopes to agree renewed borrowing facilities to the end of 2013. Net bank debt was cut to £55m by December, down from £141m at the end of 2010. Last year the company saved £12m by withdrawing an inflation-linked pay rise and reducing the size of its head office.