Shares in Coalfield Resources fell Monday morning after its part-owned subsidiary, UK Coal Mine Holdings, reported a 'major' underground fire at Daw Mill Colliery.
UK Coal issued a statement saying that on Friday afternoon a major fire broke out underground at Daw Mill Colliery in Warwickshire and that it is not expected that the mine could be recovered to operational status in anything less than three to six months.
The mine had already been the subject of significant uncertainty over the last year. The restructuring of UK Coal in 2012 achieved medium-term security for the mine providing it was able to produce coal safely reliably and efficiently.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"The fire puts that security for Daw Mill seriously in doubt and the company will consult over coming weeks with the workforce on the implications for them," UK Coal said.
The fireAs a precaution UK Coal evacuated 92 underground workers from the mine in accordance with standard emergency procedures. However, four hours after the fire broke out the situation had become serious enough to evacuate all miners and this was completed within 90 minutes.
The group said that in an attempt to stem the fire, ventilation to the mine was switched off at 22.45 hrs to reduce oxygen levels and attempt to starve the fire. There is no risk or impact from the incident to residents living close to the site or above the mine, it added.
The company plans that a core team will remain at the mine to bring the situation under control and achieve an orderly closedown of operations.
Statement from UK CoalThe group gave the following statement: "The company has been in close contact with officials at the Department of Energy and Climate Change over the weekend who have recognised the exceptional severity and hazards of the fire at Daw Mill.
"The Department has indicated that it will work directly, and through the Coal Authority, to assist UK Coal Mine Holdings to ring-fence the situation at Daw Mill and to seek, in the public interest, that the company achieves a prompt, safe and orderly close down of the mine over coming months.
"All parties have also indicated their support to ensuring that the remaining businesses of the company, which are viable, continue to operate without disruption."
The Chief Executive of the business, Kevin McCullough, commented that the fire was on a scale "not seen for decades".
Coalfield Resources is joint owner of UK Coal, alongside UK Coal Employee Benefit Trust.
The share price fell 9.43% to 5.76p by 10:20 Monday.
NR
-
Which investment trusts could benefit from lower interest rates?As vehicles for long-term investments, many investment trusts were hit when interest rates rose in 2022. With interest rates expected to fall by the end of the year, could now be the time to invest in one of these unloved sectors?
-
How to protect your personal and financial data from cyber attacksM&S and the Co-op are the latest retailers to suffer from cyber hacks but consumers also need to be vigilant
