The Scottish Resources Group (formerly Scottish Coal), has been hit by low coal prices, and announced plans to close mines, cut 450 jobs, close their Alloa headquarters and drastically reduce the size of the firm.
On Thursday the MP visited the Broken Cross mine near Douglas Water, where Scottish Coal want to relocate their headquarters.
The meeting was organised after the local MP was approached by unions and constituents working for Scottish Coal and asked for his support.
“At the meeting we discussed the restructuring of SRG (formerly Scottish Coal) and also how the UK and Scottish Government and others can help with that process,” said Mr Mundell.
He explained that although coal demand has never been higher in recent years, sales prices are very low. This meant that SRG’s cash flow was under severe pressure.
The company wanted to downsize to their two largest and lowest cost sites (Broken Cross and House of Water/Burnston) and work out the other four operational sites which are due to be exhausted in the coming year anyway.
“Until market prices rise the company says they cannot afford to open up the replacement sites for those which close. New sites have huge opening up costs and the local authorities require bond cover to ensure that obligations are met.
“SRG point out that the bond market has almost completely closed and as a result, when the market does improve, and they have the cash to commence new sites, they will not be able to do so as all Scottish planning permissions require the lodging of a financial bond to ensure such priorities as site restoration.
“This week I am meeting UK Energy Minister John Hayes along with other MPs from affected constituencies. At this meeting we want to see what can be learned from the restructuring of UK Coal, in which the Dept of Energy was involved.
“Obviously we also want to see if any Government or European funding might be available.
“My priority is to ensure that as many jobs as possible are retained for my constituents in South Lanarkshire and Upper Nithsdale, but also want to ensure there is a mechanism for ensuring site restorations can go ahead as promised.”