The collapse of Scottish Coal, and the loss of almost 600 jobs, is a devastating blow for the families and local communities affected, Dumfriesshire/Clydesdale MP David Mundell said this week.
The MP was talking after the Court of Session in Edinburgh appointed Blair Nimmo and Tony Friar, of KPMG, Joint Provisional Liquidators.
After taking control of the firm Blair Nimmo announced that the company’s situation was so serious it would have to cease trading immediately, with 590 job losses.
The company’s remaining 142 employees have been retained meantime to assist in securing the sites.
Scottish Coal announced last month that 450 staff were being put on notice of redundancy as the company struggled with serious financial difficulties. Falling coal prices and rising operational costs were blamed for causing losses and "significant cash flow pressures".
At the time the company came up with their own plan to save the company, proposals which also included closing their headquarters and some mines.
However at the end of last week the company went into liquidation.
Liquidators KPMG said that despite significant efforts in recent months, Scottish Coal had been unable to secure the level of investment required to enable the business to continue.
Commenting local MP David Mundell said: "This is a major blow to all those who have been working round the clock over the last few weeks to try and save Scottish Coal.”
Since last month’s announcement that the company were in financial difficulties the MP has met both unions and management to discuss possible ways of saving both the company, and the jobs.
The MP said: “However, right now we need to prioritise help and support for those facing job losses, and everyone involved needs to work together to try and find a way forward. This will be a distressing time for those who have lost their jobs and my thoughts are with them and their families.
“I will continue to keep in close contact with the unions and the Energy Minister, as well as the Scottish Government, so that I can do everything possible to support the individuals and communities affected. There are now big questions over the future of the sites, but it is clear from this announcement that, given the serious and unsustainable financial position, there is no immediate solution.
“Restoration of the Scottish Coal sites is another priority, especially for those living in the affected communities. If there is no prospect of these sites being worked again then they must be restored to avoid blighting the local areas. Equally it is very important that worked out sites where restoration has not been started, or completed, should be restored,” he added.
Scottish Coal operated six open cast mines in East Ayrshire, South Lanarkshire and Fife. 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.
Employees at the various mines lived in Upper Nithsdale in Dumfriesshire, as well as in Ayrshire and Clydesdale, so these communities would also be affected by the job losses, added Mr Mundell.
The Scottish coal industry supports 4,500 direct and indirect jobs and is worth £500m a year. Scottish Coal was the biggest surface mining supplier in Britain, and biggest coal firm in Scotland.
Joint provisional liquidator, 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. 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”
"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."
The administrators will now look to secure the sale of certain sites as well as the company's key assets in the coming weeks.
Mr Nimmo added: "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."
Mr Mundell said that whilst the immediate priority must be the substantial job losses the firm’s collapse also had implications for our energy security. Coal has produced almost 40% of the UK's electricity, leaving many questions about how this gap will be filled in by imported coal in the short term and replaced by other sources in coming years.
And he went on: “There is also the question of restoration of these large sites, something I know concerns local communities. This is another issue where I will be seeking answers.”