A RESCUE deal has been agreed that saves the jobs of about 200 North-East coal miners.
Bosses at UK Coal, which employs 2,500 workers nationally, including 62 at a surface mine near Crook, County Durham, admitted the company had faced collapse in the new year unless major restructure plans were completed.
Chairman Jonson Cox said the overhaul was a "final chance" for the company's mining operation to adopt ways of working that made the business viable.
Britain's biggest coal producer, which will now be named Coalfield Resources, has split its operations into two businesses – a mining arm called Mine Holdings and property division Harworth Estates.
Ownership of the Doncaster-based group has been broken up between the company, a newly-established employee benefit trust and pension funds.
Under the restructuring, the pension funds now own 75 per cent of Harworth Estates, which has 30,000 acres of land and other property, in return for a £30m cash injection.
The company, which generates about 5 per cent of Britain’s electricity requirements, slumped to a loss in the first half of the year as production at its mine near Coventry plunged and it struggled to manage a huge pension deficit.
In addition to safeguarding jobs at Park Wall North mine in County Durham the deal has secured the immediate futures for 127 workers employed at two mines near Ashington in Northumberland. A further 20 people are employed by the company in this region and its operations support about 200 North-East supply chain jobs.
Mr Cox added: “The restructuring has helped to safeguard 2,500 highly skilled and well-paid jobs, a skilled supply chain, and created a funding plan for the £450m pension deficit that UK Coal has been burdened with.”
The group also saw several changes among its board of directors as part of the shake-up, including the appointment of RWE Npower’s chief operating officer, Kevin McCullough, as chief executive of Mine Holdings
Mr Cox explained: "This has been a restructuring of unprecedented scale and complexity for this size of company, dealing with a legacy structure that was inherited on the privatisation of British Coal in 1994. I'm delighted that we've succeeded in completing it. Without it, it was almost certain that the coal mines would have been unable to trade beyond the first quarter of 2013."
"The support provided has given a final chance to the mining business, mine management and the workforce, to adopt the changes needed to ensure safe, reliable and efficient production for the next 5-10 years. While we have successfully reduced deep-mine manpower costs by 12.5 per cent, and started to change working practices, our inherited cost structure still remains too high and labour productivity too low.
"On the property front, our successful sales programme of the last two years has enabled us to halve the group's bank debt, in turn allowing this restructuring to proceed. We now look forward to achieving the medium and long term realisation of value from the portfolio, for the benefit of shareholders and the pension funds."