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UK Coal divides operations into two businesses

Britain's biggest coal producer has finished a complicated reshuffle of its business in a move that safeguards 2500 jobs.

UK Coal, which was renamed Coalfield Resources, has split its operations into two businesses – a mining arm called Mine Holdings and property division Harworth Estates.

Ownership of the South Yorkshire-based group has been broken up between the firm, a newly established Employee Benefit Trust and the Pension Fund.

The Pension Fund now owns 75% of Harworth Estates, which has 30,000 acres of land and other property, in return for a £30 million cash injection.

The company, which generates about 5% of Britain's electricity requirements, fell to a loss in the first half of the year as output at its Daw Mill mine near Coventry plunged.

Chairman Jonson Cox said: "The restructuring has helped to safeguard 2500 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 saw changes on its board as part of the shake-up, including RWE npower's chief operating officer Kevin McCullough becoming chief executive of Mine Holdings.

The group's other deep mines are at Kellingley, North Yorkshire, and at Thoresby, Nottinghamshire.

UK Coal had warned it was unlikely that Daw Mill, which employs 800 staff, would continue to operate beyond early 2014.

Mr Cox said: "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 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."

Control of Mine Holdings has passed to a newly established Employee Benefit Trust, which holds shares representing 67% of the voting rights.

Finance director David Brocksom will step down on December 31 but will still remain available under contract for some months.

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