Hatfield Colliery closure speeds up UK exit from deep coal mining

LONDON (Reuters) - Britain's Hatfield Colliery will stop producing coal with immediate effect after being unable to sell its coal following the sharp rise in the UK's carbon tax, Prospect union said on Tuesday. The closure of the employee-owned mine in South Yorkshire is 14 months earlier than expected. Around 500 employees work at the mine. In April, Britain's carbon tax, which charges power producers for each tonne of carbon dioxide (CO2) they emit, almost doubled to 18.08 pounds per tonne to encourage utilities to switch fuels, as coal-fired power generation produces almost double the amount of CO2 as gas-fired plants. "Hatfield has been unable to sell its coal because of the government's refusal to sponsor coal contracts with generators and the doubling of the UK's carbon tax," Prospect negotiator Mike Macdonald said. Prospect union represents 19 management team members at the colliery, which has been run by an employee-owned trust since 2013. Britain's remaining deep mines, Kellingley in North Yorkshire and Thoresby in Nottinghamshire, owned by UK Coal, are due to close later this year. Fierce competition from cheaper markets such as Colombia, Russia and the United States, falling domestic demand and a government drive away from carbon-intensive coal power generation have contributed to the decline of coal mining in Britain. (Reporting by Sarah McFarlane, editing by David Evans)