NEW hope has been offered that Scotland's failing coal-mining industry can be saved after energy and waste group Hargreaves Services became preferred bidder for the assets of Britain's second- largest coal producer.

It is understood the deal involves taking over Scottish Coal's six working open-cast coal mines in East Ayrshire, Fife and South Lanarkshire. It is expected to rescue many of the 600 jobs lost at Scottish Coal.

The move would make Durham-based Hargreaves the main player in what is left of Scotland's coal-mining industry, having bought the debt of troubled ATH, the second biggest coal producer in Scotland, in March.

At its peak in 1957 Scottish coal-mining employed 87,000 men and after the Second World War it had 187 collieries. It was expected to be reduced to just hundreds of staff when Scottish Coal's two operations, the Scottish Coal Company and Castlebridge Plant, became insolvent.

Scottish Coal, which was the biggest coal producer in Scotland and second-biggest in the UK, dug 3.5 million tonnes of coal out of the ground each year, all of it from opencast operations, more than a decade after deep mining ceased.

MSPs recently said coal generates £450 million for the Scottish economy each year, and supplying the industry supports 4000 jobs.

The Scottish Coal Company was put into liquidation last month with sister operation Castlebridge Plant put into administration. It threatened to put coal mining in Scotland on the brink of oblivion.

But yesterday liquidator and administrator KPMG announced Hargreaves Services had preferred bidder status.

It will be working with the company to "finalise the acquisition of various properties, plant and equipment and stocks" in the next six weeks.

Sources close to the deal said Hargreaves would attempt to retain as many jobs as possible.

Blair Nimmo of KPMG said: "These developments represent a positive step forward in our efforts to find the best possible way to resume mining and return employment to the affected areas."

Gordon Banham, chief executive of Hargreaves Services PLC, said: " We remain fully committed to investing to create a successful and sustainable mining business in Scotland that is founded upon profitable sites."

ATH Resources owns five working opencast mines in Fife, East Ayrshire, and Dumfries and Galloway, plus several former mines, employing 300 people.

Hargreaves said it had paid £5m for ATH's debt and planned to restructure the firm's main operating subsidiary, Aardvark TMC. ATH has 200 staff in Ayrshire, Fife and Dumfries and Galloway.

Earlier this month, the Scottish Government convened the Scottish Open Cast Mining Taskforce in a bid to stop the job losses.

The Hargreaves deal would mean leaving 11 sites owned by Scotland's biggest coal producer that have had coal extracted but have not been restored. Campaigners have criticised Scottish Coal's millionaire boss Colin Cornes after it emerged the 11 sites have been only partially restored or not restored at all.