Outlook: RJB Mining

SO MUCH for Tony Blair's curiously Old Labour attempt to save what is left of the British coal industry. Things seem to be getting just darker and darker for RJB Mining, notwithstanding the gas moratorium and the former Paymaster General's attempt to arm twist the generators into bailing it out.

Profits have disappeared down a mineshaft and Richard Budge has been obliged to recognise what has been plain to the market for a long time - that the earning capacity of his remaining collieries is a pale imitation of the prospectus investors bought into four years ago.

Meanwhile, coal can be bought on the spot market at three-quarters of the price it costs RJB just to dig the stuff out of the ground and Arthur Scargill looks in the mood to make strike action an annual event. In truth the moratorium on building further gas-fired stations has been observed more in the dispensations than in staying the tide. As soon as a better political cause came along - like winning the Welsh Assembly elections - New Labour conveniently forgot about its balanced fuel policy and allowed BP to build a whopper of a station in Baglan Bay.

But the real damage has been done by lower-priced contracts with the generators, which have left RJB with barely enough earnings to cover the dividend and a large question mark hanging over one of the pits in its supposedly super modern Selby complex. RJB's investors need no reminding that in an extractive industry like coal, the value of the assets is in constant decline. Their shares have lost 90 per cent of their value in three years, meaning that RJB could be picked off now for less than pounds 100m. Even so there is not buyer in sight. Mr Budge is the supreme optimist, but even Old King Coal is going to struggle to dig his way out of this one.