Government offers beleaguered UK Coal £10m loan at 10% interest
UK Coal, the troubled mining group, has been offered a £10million loan at an interest rate of 10 per cent by the Government.
This is far above the UK base rate at 0.5 per cent. While industry sources claimed it reflected the Government's antipathy towards the coal industry, the high interest rate also reflects the risks associated with paying back the money.
The firm is still in final negotiations with the Government and it is expected to make an announcement on its future this week.
Loan offer: UK Coal plans to close its two deep-mine pits and sell its six open cast pits.
It plans to close its two deep-mine pits - two of the last three in the country - and sell its six open cast pits.
However, without the Government cash and a matching loan from private investors, it would have to close both deep mines at once rather than winding them down over the next 18 months.
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