Almost 600 jobs were lost on Friday after liquidators from the accountancy firm, KPMG, were called in at Scottish Coal. A further 140 workers have been retained but only to secure the mines, including the largest, Broken Cross in South Lanarkshire.
"In light of Scottish Coal's poor trading and financial position, we have had to cease trading with immediate effect," said Blair Nimmo, joint provisional liquidator and head of restructuring at KPMG in Scotland. "It is extremely regrettable that we have had to make so many redundancies but have been left with no other option," he said.
Scottish Coal is the main trading subsidiary of Scottish Resources Group and a second subsidiary company, Castlebridge Plant was placed into administration at the same time.
Scottish Coal operates six open cast coal mines in Scotland, in East Ayrshire, Fife and South Lanarkshire. The Alloa-based company owes its origins to the 1994 privatisation of British Coal.
The business has been suffering from a combination of falling coal prices, rising operational costs and a number of its sites exhausting their reserves.
Despite significant efforts in recent months, the company was unable to secure the level of investment required to enable the business to continue, according to KPMG. Scottish Coal had last month announced plans to slim down, blaming cheap imports from the US – where shale gas has displaced local coal – for many of its problems.
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