U.K. to End 300 Years of Deep Coal Mining as Prices Slump

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Britain plans to close its last deep coal mine in December, spelling the death of an industry that’s kept the nation’s economy humming since the Industrial Revolution.

The U.K.’s last deep underground mine, located at Kellingley in northern England, will shut around Dec. 15, U.K. Coal Holdings Ltd. said in a statement. The company’s Thoresby mine ceases production on Friday.

The closing of Kellingley will mark the nation’s exit from an industry that employed more than a million workers at 3,000 pits a century ago. Since 2000, U.K. power generators Electricite de France SA to RWE AG bought more of the fuel from abroad, where coal from Australia to Colombia is cheaper, according to the Federation of U.K. Coal Producers. European prices slumped to an eight-year low in April.

“The U.K. coal industry has been in structural decline for 40 years,” Paolo Coghe, an analyst in Paris at Societe Generale SA, said Friday by phone. “It’s no longer positioned to withstand an extended period of low prices such as the one we are experiencing now.”

The U.K. had three operating deep mines through the end of June. A pit at Hatfield in northern England shut June 30 after failing to get additional government funding to cover the costs of a managed closure that was to be completed next summer, John Grogan, the chairman of the employee trust that owns the mine, said Friday by phone.

Deep pits accounted for 38 percent of the U.K.’s coal output in April, with surface mines making up the rest, Department of Energy data showed.

‘Difficult Trading’

The closing of Thoresby “follows a long period of difficult trading conditions, largely due to low international coal prices and geological issues at both mines,” U.K. Coal said in the statement. “Mining at Thoresby dates back to 1925 and Kellingley started production in 1965.”

David Blackburn, a spokesman for U.K. Coal at the Brunswick Group, a public relations company in London, did not immediately respond to a request for comment.

Britain imported 1.9 million metric tons of the solid fuel in April, compared with domestic production of 757,000 tons, according to the Department of Energy. Purchases from abroad covered a record 84 percent of total consumption in 2014, compared with 21 percent in 1995.

European coal for next-year delivery to the Amsterdam-Rotterdam-Antwerp region slumped 73 percent from a record in 2008. The 2016 contract advanced 0.3 percent to $58.70 a ton in London Friday, broker data show.

Chinese Imports

Worldwide coal prices tumbled as growth in supply continues to outpace demand. China reduced imports fell 10 percent in 2014 from a year earlier and may plunge as much as 42 percent in 2015, according to Bloomberg Intelligence.

The world’s five largest exporters, including Australia, Colombia and Russia, trimmed shipments by 5.5 percent to 218 million tons in the second quarter from the same quarter a year earlier, while purchases by the eight largest importers dropped 6.5 percent to 150 million tons in the same period, according to data compiled by Bloomberg.


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