Betws Colliery, located in west Wales said yesterday that it would have to close ‘within weeks’ because it could not afford its ‘substantially increased business insurance premiums.’
Nick Hood, London senior partner at Begbies Traynor, said the rising costs of EL premiums were having a detrimental effect on other companies and causing them to go bust.
‘Insurance costs are going through the roof,’ he said ‘and mining is a high risk job. Companies in the construction market are also among the worst hit,’ he added, pointing out that one company he knew of had seen its EL premium rise from £30,000 in 2001 to £140,000 this year.
Closure of the mine, which opened 24 years ago and was privatised in 1994, would lead to more than 100 job losses.
The Office of Fair Trading, which is currently investigating this issue, published a report earlier this month saying EL insurance rose by 50% in 2002. The government’s final report on the matter is due in August.
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