Matlby colliery set to close

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Maltby Colliery is to close with the loss of 540 jobs by the end of March, after owners Hargreaves Services rejected plans to save the 100 year old South Yorkshire pit.

Work won’t entirely cease at the pit, which hit problems in May when water, oil and gas leaked into excavations designed to open up new reserves.

Hargreaves says it expects to extract around a million tonnes of coal from colliery spoil on the surface and it is exploring the possibility of generating electricity by burning methane, which will continue to be extracted from the pit.

Staff at the colliery will also continue to provide mining management services to Hatfield Colliery.

Coal will continue to be mined until the mine’s existing face is exhausted but, although Maltby is officially being mothballed, rather than closed, equipment will be removed and Hargreaves expects to gain £14 million from its sale.

Hargreaves said in a statement: “The decision to recommend mothballing the mine at Maltby has been a difficult one but the board is confident it is the right decision given the health and safety, geological and financial risks. The board also believes that in the longer term the decision will reduce the volatility of the group’s earnings.”

Hargreaves says redundancy costs would amount to £7.3 million, if everyone at the pit were to lose their jobs. That includes £3.7 million in enhanced redundancy payments, which the company says it will make, although it is not obliged to.

The company thanked a working party of employees, union representatives and external consultants, which drew up alternative proposals, designed to keep the pit open, but said the proposals weren’t viable.

Hargreaves said: “The company wishes to express its thanks to the working party for their great efforts made on behalf of the wider Maltby workforce.

“The working party submissions have been carefully considered and evaluated both by the board of Maltby Colliery Limited and, subsequently, by the board of Hargreaves Services. The company has now concluded that, as with its own previous findings, the plans presented by the working party do not provide it with a viable alternative solution. It is therefore with regret the Company confirms today that the proposed mothballing of Maltby Colliery will proceed.

“The Company remains committed to exploring alternative employment opportunities for staff, both within the wider Hargreaves Group and externally. The Company is also working closely with external agencies to provide maximum opportunities for its committed and loyal workforce.”

Hargreaves says the group is expected to make a £5 million gain from mothballing Maltby.

“The approximate cash impact of mothballing the mine in the current financial year will be an outflow of £7 million. The estimated impact in the following financial year will be an inflow of £14 million. The estimated net cash inflow over the next three years will be approximately £5 million,” said the Company.

Hargreaves is writing off £45 million as a result of the closure, but says none of that is in cash and adds that land at the colliery is worth £11 million after taking into account costs of restoration totalling £6 million.