590 jobs go in coal group collapse

Scottish Coal has announced it is in liquidation with the loss of almost 600 jobs.

The company operates six open-cast coal mines in Scotland - in East Ayrshire, South Lanarkshire and Fife. Administrators cited a combination of falling coal prices and rising operational costs.

"Despite significant efforts in recent months, the company was unable to secure the level of investment required to enable the business to continue," a statement from KPMG said on Friday. "Immediately following today's insolvency appointment, 590 employees were made redundant and all operations have ceased with immediate effect."

The statement said 142 staff had been retained while administrators consider what to do with Scottish Coal's assets.

Scottish Coal is the main trading subsidiary of Scottish Resources Group Limited. Another subsidiary company, Castlebridge Plant Limited (CPL), was also placed in administration at the Court of Session in Edinburgh. The business employed a total of 732 people.

Blair Nimmo of KPMG said: "In light of Scottish Coal's poor trading and financial position, we have had to cease trading with immediate effect. It is extremely regrettable that we have had to make so many redundancies but have been left with no other option.

"We will be working with the employees and the relevant government agencies to ensure that the full range of support is available to all those affected. We will be looking to secure the sale of certain sites as well as the company's key assets in the coming weeks. It is still possible that mining operations will continue and offer future employment prospects for at least some of the people who have lost their jobs today."

The largest job losses are at the Broken Cross site at Douglas Water in South Lanarkshire where a total of 191 posts will go. At the Dalfad mine in Muirkirk, East Ayrshire, 101 jobs have been cut and 89 staff will go at Dunstonhill at Patna in East Ayrshire.

Scotland's Energy Minister Fergus Ewing said: "This is very disappointing news, and our immediate concerns are for the workforce and their families. We have been working closely with the company and the coal sector over the past year, and have sought to provide all support that is within our power to do. Our efforts are directed towards the objective of seeking to continue the mining operations and the preservation of the jobs in Scotland and ensuring the responsible restoration of sites. That work continues and I have made contact already with the appointed administrators KPMG and we have undertaken to work closely together over the course of the next few days."

UK Energy Minister Michael Fallon said: "While clearly a commercial decision for the company's directors, it is a sad day for the Scottish mining industry and for the communities in which I know the company provided valuable employment. The Government will do all it can to help ensure that those redundant are supported at this difficult time."