BRITISH COAL CONTINUES BATTLE AGAINST IMPORTS

BRITISH COAL CONTINUES BATTLE AGAINST IMPORTS

British Coal has won the first legal action of its life-or-death battle to prevent the country's electric utilities from turning to cheaper imports for their coal supplies.

On Friday the company won a temporary court order preventing the South of Scotland Electricity Board from using imported coal supplies.Coal industry chiefs are worried that the SSEB's buying policies could set a precedent for Britain's other electricity boards, which are operated by the government but are due to be privatized. Most crucial would be the Central Electricity Generating Board, which is British Coal's major customer.

An Edinburgh judge granted an interim order preventing the SSEB from burning imported coal at two of its three Scottish power plants after British Coal claimed it had an exclusive contract to supply the board.

A spokesman for the SSEB admitted that this contract to purchase 4.5 million metric tons a year of British coal exists, but he added that it runs out on March 31 and will not be renewed.

Instead, the SSEB has contracted with U.S., Australian and Chinese producers to deliver a total of 1 million metric tons of steaming coal beginning April 1, and is negotiating with the same undisclosed suppliers for the delivery of additional supplies later in the year.

Although it will not discuss coal prices, the SSEB has claimed that the imported coal is 40 percent cheaper than British supplies.

SSEB Chairman Donald Miller is prepared to stand firm on his policy to buy coal from the cheapest reliable source. He said Friday of British Coal: Unless they are prepared to modify their prices, we cannot take further supplies from them from the first of April.

The court order applies to the SSEB's power stations at Longannet and Cockenzie, which are supplied under the contract with British Coal. However, it does not affect the SSEB's third plant, Kincardine. The board said, therefore, it has the option of using the imported coal at Kincardine or stockpiling it until the court order is lifted.

The order applies until a final court judgment is made on the issue, and this is expected within two weeks.

British Coal has warned that if the SSEB uses imported coal it will spell the end of its Scottish mines. One mining complex, at Longannet, invested in two pits solely to meet the needs of the adjoining power station.

However, a greater worry for British Coal is that the CEGB will similarly switch to using only imported coal when it is privatized. The CEGB has already revealed plans to build a coal import terminal near the port of Southampton.