UK Coal nervous over BHP Billiton’s Drax offer
BHP Billiton, the Anglo-Australian mining giant, has rejected claims that its bid for the Drax power station would infringe competition rules and precipitate thousands of job losses.
Producer UK Coal forecasted yesterday up to 9,000 jobs could be axed in the industry if BHP Billiton took over Drax, the UK’s biggest power station, because the group would use its own coal from South America and South Africa.
The takeover would mean the closure of at least three mines with 3,000 coal jobs and 6,000 ancillary post rendered surplus to requirements, UK Coal projected.
International Power and Goldman Sachs, an investment bank, are also interested in acquiring Drax.
UK Coal CEO Gordon McPhie said advice would be sought from the Office of Fair Trading and European courts, if necessary.
Drax supplies up to six per cent of the UK’s total power demands.
Drax’s US owner, AES, gave up on plans to restructure its 1.3 billion pounds debt earlier this month after failing to reach a deal with creditors.
BHP Billiton’s offer is worth an estimated 95 million pounds.
