COAL mining in Scotland is on the brink of oblivion after Britain's second largest producer said more than half of its workers are to be axed as major financial problems threaten its future.
The country's oldest major industry, which at its peak in 1957 employed 87,000 men and after the Second World War had 187 collieries, will be reduced to little more than 500 workers after Scottish Coal's parent company announced it is to axe 450 of its 758-strong workforce.
Scottish Resources Group (SRG) also said it would close or mothball environmentally sensitive mining projects, blaming the rise in cheap imports and fracking in the US for natural gas.
The National Union of Mineworkers said it could affect six out of the eight surface mines operated by the group and called on the Scottish Government to help the company.
President Nicky Wilson said: "The crisis has been created by factors outside the company's control."
First Minister Alex Salmond said Energy Minister Fergus Ewing has been working closely with the company and others to help. He added: "We'll do everything we can to assist SRG to maintain operations as a priority. And, of course, we'll provide support to those facing redundancy."
MSPs recently asserted that the coal industry generates £450 million for the Scottish economy every year and the supply chain supports 4000 jobs.
Doncaster-based ATH Resources,with an estimated 250 Scots staff and five open-cast mines in Scotland, fell into administration in December. Last week, coal producer Hargreaves Service vowed to help safeguard jobs at ATH after buying up the troubled miner's debt.
Many of the Scottish Coal jobs will go when the company's Castlebridge headquarters in Alloa are closed. Operations are expected to be overseen from its current site at Broken Cross at Douglas Water, South Lanarkshire.
Scottish Coal plans to gradually close production at four of its nine surface mining sites, including St Ninian's in Fife, Dalfad and Dunston Hill in East Ayrshire and Mainshill, South Lanarkshire.
Mainshill was the scene of a battle with environmental protesters after former Tory prime minister's son Lord Home allowed the company to mine on his estate.
In March 2010, SRG arranged a £47.5m debt facility with Lloyds Banking Group, doubling an existing £23m facility with another banker, which the firm said confirmed the financial strength of the group. But now it has emerged the bank is only prepared to extend the overdraft on a month-by-month basis.
In a presentation, managers told workers: "In the absence of new investment and urgent stakeholder support there is a high probability that SRG will be unable to continue."
The company said it will not start mining any new sites until it becomes commercially viable.
Scotland's last underground mine at Longannet closed in 2002 and all coal is now mined from open-cast sites.
Scottish Coal's latest annual accounts showed a drop in operating profit from £21.7m to £6.13m while investment in new sites had risen from £5.21m in 2010 to £17.09m in 2011.
Workers were told the "continued depression of the international coal price has led to coal sales contracts with generators being uneconomic".
In a statement, SRG said it was holding discussions with all stakeholders, staff, the Government and councils where operations have taken place.
The news came 29 years to the month since the start of the nationwide miners' strike. The stand-off between the NUM and Margaret Thatcher's Tory Government affected all of Scotland's 12 pits and 15,000 miners and saw trouble between strikers' and police at Bilston Glen mine in Midlothian.
Labour MSP Neil Findlay and MP David Hamilton have urged Justice Secretary Kenny MacAskill to launch an independent review of the convictions of 500 men found guilty of offences during the dispute.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article