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Richard Budge, ex-boss of Britain's privatised mines, plans a £35 million AIM placing for coal and power play Powerfuel.

Broker Collins Stewart is handling the placing, which will put a £56 million value on Powerfuel. The company's stated intention is to reopen Hatfield colliery near Doncaster, which Budge has owned through a private vehicle since 2001.

Hatfield, a deep mine which Budge argues could now produce more than two million tonnes of coal a year for 14 years, was capped and closed on the loss of Government support in 2004. Powerfuel now claims it has an indicated coal resource of 27 million tonnes.

Budge, whose former company RJB Mining took over the rump of British Coal but failed to win a state subsidy for 'clean coal technology', has now negotiated offtake agreements for 600,000 tonnes a year at £32 a tonne with German power group E.ON. In addition, he has reached agreements for one million to 1.5 million tonnes annually with Drax power station.

Powerfuel, which will need to go 70 metres further down at Hatfield, claims another string to its bow in the shape of land bought by Budge near the M18 motorway with preliminary planning permission for a 430 megawatt gasification power station. With rivers, canals and railway nearby, the proposed power station would be close to existing infrastructure.

Collins Stewart has set 6 or 7 March as target date for the float. Budge's stock market return should attract investors' interest.
Robert Tyerman

THE future looks grim for Rossington Colliery, Don Valley MP Caroline Flint has admitted. The Health Minister met with UK Coal chief executive Gerry Spindler and human resources director Norman Haslam last Thursday.

After the meeting she said: "The short-term future is grim. The company is set on 'mothballing' the colliery as soon as the present face is finished".

The 90-year-old pit - the last surviving remnant of Doncaster's historic involvement with the coal industry - has lost over £1m per month for the last 18 months, and the decision to close was announced earlier this month in UK Coal's six-monthly report to the stock exchange.

Rossington is one of a number of pits where UK Coal has been operating at a loss - the company has lost £30 million in the first six months of 2005.

Most of the mine's 330-strong workforce is facing redundancy, though a small number will move to duties amongst the group's other pits, and some will be retained for up to three years in 'care and maintenance', while
UK Coal seek the £15-20 million needed to open a new face at the pit.

But Ms Flint warned that if the pit spent three years in mothballs, she is not sure it could come back, adding: "If the colliery remained dormant for that length of time, I am not confident it could ever re-open".

A controversial plan, to introduce 12-hour shifts for the pit's remaining lifespan, has also been abandoned.
Ms Flint said: "The change in the shift system would only have boosted the men's pay for the last few months of production. It would not have kept the colliery open beyond this face, whatever production levels were achieved.

"As such, the men have rejected the shift change. UK Coal accept this. I have urged them to work with the workforce to find the best working arrangements for the months ahead."
UK Coal spokesman Stuart Oliver told the Newsletter: The talks were very constructive - Caroline was keen to understand the circumstances leading to the mothballing. We explained that the problem was a major geological setback, and not the fault of management or workforce.

"At the moment, whilst the company is losing money, we cannot justify the investment into a new coalface.

"We did discuss the fact that the Government needs to provide clarity on its energy policy and the role for coal within that, and that we need to look at how major schemes are advanced.

"At the moment, producers such as UK Coal are expected to carry all the risks, whilst generators, consumers and Governments share in the benefits.

"In future for there to be major investment, there has to be a partnership between all the interested parties - this is what happens in the USA and elsewhere in the world.

"There is no timetable for the re-opening of Rossington Colliery, or Harworth for that matter. Things will move one way or the other, from the way they are now.

"Situations change and no-one could have predicted the hike in oil and gas prices that has happened over the last couple of years, or the fact that coal would double in price as it has. UK Coal will be keeping its options open as long as possible."
06 October 2005

Bread & Roses Issue 7

Rossington Colliery, Doncaster

7 weeks still on strike

The bitter dispute at Rossington enters its 7th week of strike although of course they were on overtime ban for nearly two years before that.

The strike has been contained at Rossington although many in the mines believe the whole issue is a national one. The Union considers itself hog-tied by current legislation which bans so called ‘secondary action’.

Latest move by management is to circulate every man at the pit and urge them to break the strike, either by voting NO to a ballot aimed at renewing the 8 week immunity from dismissal which the current law provides, or else just scab. It is a familiar letter we have seen many times before in our history.

They claim the dispute has cost £0.5M (the Unions claim for an Equitable bonus scheme in line with most other collieries would cost £25,000 per week) that the production they require from the pit is 25,000 tonnes per week, and that they are prepared to change the bonus system but not increase the total figures. They also challenge the Unions claim that a second ballot would cover the men from dismissal.

The Union’s letter of response unfortunately will not reproduce well enough to print verbatim, but is an excellent riposte: "..Leading Employment Law expert John Hendy QC has provided advice in relation to s.238A Trade Union and Labour Relations (Consolidation Act) 1992, which is a section inserted by the Employment Relations Act 1999 which gives unfair dismissal protection to those on official industrial action for a period of 8 weeks. A strike may be in breach of contract and could result in dismissal - but the "Dear Colleague" letter (the management's letter) is carefully worded not to include reference to the fact that dismissal for taking protected industrial action is automatically unfair for 8 weeks from the start of any protected industrial doubt he will know that the maximum compensatory award for unfair dismissal is now £51,700."

The response goes on to prove that the figures used by the Union come from UK Coal, that all in all the losses are £752,500 per week. They also point out that despite the dire financial situation allegedly existing at the colliery, UK Coal have just paid out a 6 month dividend to shareholders of £7.3 million: "more than enough to pay the bonus for over 20 years!"


"They say, "please consider your position carefully" - too right mate - consider what this bunch would do if we give up with nothing. There is already a project looking at round the clock working reducing wages etc."

The final reference is to new total reorganisation of the UK Coal shift system and an attack upon every one of their miners at every pit. They are looking for 24 hour round the clock coaling and reduction of costs and expenditure, obviously this will not be the coal owners and the shareholders, but the men whose sweat (and often blood) produce the fortunes in the first place. This factor could just be the one that finally brings this issue to a head, and cements the whole UK workforce into national strike action. This has been long waited for by the long suffering men at Rossington.

Meantime efforts to save neighbouring Hatfield Colliery continue. Mr Richard Budge the former Director of RJB Mining (now UK Coal) is the preferred bidder for Hatfield Colliery. He has until the 6th October to get the money together for his buy out.

Obviously we take no joy in having to sell our labour to anyone, but where the alternative was kicking our clogs on the street for the rest of our lives, we welcome the chance to maintain our living standards. Actually Mr Budge has promised a salary somewhat more than that previously earned under the now bankrupt Hatfield Coal Company. He has also promised a more humane shift system, including no weekend coaling, and union recognition. Meantime an objection from one of the other prospective buyers has been received.

We do not know the nature of the objection, but considering their plan was to stop production at Hatfield and go for total development, which would involve only employment of 30 or 40 men, probably contractors and not local Hatfield men, instead of re-engagement of the total 200 plus working force, we know which plan is better for us.

Both Branches are appealing for financial support for their efforts:-

Rossington Branch Fund, c/o 7 Holmes Carr Crescent, Rossington, Doncaster DN11OQD.

Hatfield Main Branch Fund, c/o 16 Abbeyfield Road, Dunscroft, Doncaster DN74AF.

Uncertain future: Rossington miners, from left Bob Stannard, Andy Harrison and John Dowling.

Emma Dunlop

HUNDREDS of workers face a bleak future after a South Yorkshire coal mine ceased production yesterday – ending nearly a century of mining.
UK Coal chiefs were forced to bring work at Rossington Colliery, near Doncaster, to a grinding halt after suffering multi-million-pound losses.
It ends 94 years of production at the pit.
For the next four weeks all 220 miners will still be kept on by UK Coal while they dismantle the pit equipment.
A total of 70 jobs will be shed by May, and the rest are expected to go sometime between July and August.
Coal chiefs say they are still hopeful a deal can be done to save the pit before then. However, it will need a £50m cash injection to save it from ultimate closure.
The pit will be mothballed if that money cannot be found.
The Rossington pit once produced a million tonnes of coal a year and employed more than 1,000 miners, but it has faced costly geological problems.
UK Coal chief executive Gerry Spindler said: "The men at Rossington have done an excellent job, often in geological conditions more difficult than any you experience in mining elsewhere in the world.
"There are still reserves remaining at Rossington, but they require a major investment which we just cannot finance at this time."
Miners will next week start preparing for the recovery of equipment, much of which will be refurbished before being installed at other mines.
UK Coal announced last year that production at Rossington would cease, after its half-yearly losses reached £30.6m. About 80 miners have left since then.
Rossington, which opened in 1915, was closed by British Coal in 1993 but was reopened the following year, since when it has produced 8.4 million tonnes of coal.
The Rossington closure leaves just seven deep mines in the whole of Britain. These are at Knottingley in West Yorkshire, Maltby in South Yorkshire, Meden Vale in Mansfield, Morpeth on the Northumbria coast, Edwinstone in Nottinghamshire, Arley near Coventry and Tower in South Wales.
UK Coal production director Bill Tinsley said:"With just a small parcel of coal left remaining on the current face, we... have concluded it is now the right time to prepare the face for the recovery of equipment which can be put to more productive use elsewhere."

Pit Terminology - Glossary