A colliery in Yorkshire has restarted operations, thanks to a colourful entrepreneur and his Russian backers. Down an unattractive side road on the edge of the little Yorkshire town of Hatfield, overlooked by the towers of an old mine head, you can hear the unfamiliar sound of heavy machinery shifting earth. The old pit winding engine, which is in almost perfect working order, has been put to use again. So too, for the first time in years, is the lift that can descend into the bowels of the earth at a speed of 60 feet per second, taking men up and down once more.

Hatfield Colliery, a centre of union militancy during the great strike of the 1980s, is coming back to life. Surging demand for coal around the world and hopes that improved technology can usher in a new generation of clean coal power stations has made deep- coal mining an economic prospect in the UK once again.

This was something old hands feared they would never see, after more than 20 years of relentless closures in the mining industry. Perhaps the most startling difference from the old days, however, is that some of the men in suits who visit the site to ensure that all is running smoothly don't speak in the familiar Yorkshire dialect, but with pronounced Russian accents.

It was announced last month that VTB Bank Europe, a Russian bank which has a listing in London, is investing £50m in the colliery. Their interest follows a decision by the giant coal firm Kuzbassrazrezugol (KRU) to buy 51 per cent of Power Fuel, which owns the colliery. KRU's speciality is opencast mining, in the vast Kuznetsk Basin in western Siberia, where they are relatively untroubled by environmentalists. This is the first time they have put money in a foreign venture, and possibly the most environment friendly enterprise in which they've ever been involved.

Russian cash is allowing a community built to supply labour for the Yorkshire coalfield to send its sons under ground once more. This is a remarkable coup for Richard Budge, a colourful businessman whose career has been almost as turbulent as the colliery's history in recent years.

Born in Lincolnshire, Mr budge, 56, has been in the industry since 1966 when he joined the firm of AF Budge, run by his brother Tony, who was making a fortune from opencast mining when state-owned underground mines were notoriously unprofitable. Tony Budge was a major backer of the Conservative Party, to which he donated up to £500,000. Richard Budge acted as unofficial adviser to John Wakeham when he was the Conservative minister handling energy policy.

In 1992, Richard left his brother's firm to set up RJB Mining. The brothers' fortunes then took radically different turns, which reputedly put their relations under a long-term strain. AF Budge went into receivership. A Department of Trade inquiry led to the disqualification of three of its directors, including Tony Budge. Richard Budge was not criticised by the enquiry, and when coal was privatised in 1994, his firm bought almost every working pit in Britain, earning him the nickname "King Coal''.

One of the few they didn't acquire was Hatfield, which was bought out by its management. Seven years later Mr Budge was ousted by his fellow directors from RJB Mining, which changed its name to UK Coal. He set up a new company and bought Hatfield Colliery, which had just closed, hoping he could give it a long-term future.

The oddity about Hatfield's colliery is that since it opened in 1908, it has been mining a seam about 635 metres below ground, when everyone knew that there was a bigger, better seam not much further down. High Hazel seam, which kept the Hatfield miners busy, had an average thickness of about 1.4 metres, only 70 metres further down there lies the best coal seam in the country, the Barnsley seam, whose thickness varies from 2.6 metres to 4.3 metres.

But High Hazel seam had one particular advantage - its coal burnt particularly well in domestic grates. The old National Coal Board ran a scheme to supply free coal to all its employees - the sources of a myth that miners' families kept coal in the bath. The NCB set aside one colliery which specialised in extracting coal from the High Hazel seam to distribute to its workforce, while the Barnsley seam was mined by other pits across South Yorkshire and the East Midlands.

To this day more than 27 million tons of recoverable coal lie untouched below the tunnels that formed the Hatfield coalface. In 2003 as the higher seam became exhausted, Richard Budge's firm Coalpower applied to the government for money to sink their shafts down another 70 metres to reach the Barnsley Seam. They were backed by an energetic political campaign orchestrated by the local MP, the late Kevin Hughes. He extracted some money from the Department of Trade, but not enough and not on the right terms to save Coalpower, which went into administration. In 2004 the colliery closed again.

Normally that would have been the end. The tunnels would have been filled in to prevent subsidence, and it might never have been worth anyone's while to sink another shaft. But Mr Budge and his engineers, knowing the value of the coal that lay untapped beneath their feet, put steel caps on the shafts to make them safe, and hoped for a change in the economic weather.

That came over the past two years as the world price of coal shot up from less than £18 a ton to more than £27, adding 50 per cent to the value of the coal underneath Hatfield. Powerfuel and KRU are investing £110m in new machinery and buildings for the pit. From 2009 they expect it to be producing 2 million tons of coal a year for 15 years.

They are hoping to keep the pit going for much longer than that, however, because alongside it is another disused pit with huge reserves so they hope that as they reach the boundaries of the Hatfield pit they will be able to just keep on digging.

In its heyday in the 1960s, Hatfield Colliery employed 2,500 men. Mechanisation had brought that figure down below 1,000 before the 1984-85 miners' strike. Hatfield was one of the centres of militancy and there were ugly scenes at the pithead when a few strike breakers drifted back to work in the summer of 1985.

Now an experienced workforce of 220 miners is back. They have sunk two shafts down into the Barnsley seam and are creating the tunnels that will be the new coalface. Most are members of the UDM, the breakaway union formed in Nottinghamshire by miners who refused to join the strike. Chris Kitchen, Yorkshire Secretary of the National Union of Mineworkers, is close to banging on Mr Budge's door hoping to come back in peace.

''We both want the pit to succeed, and we both want the miners to get home safely after a day's work,'' he said. "The only possible area of disagreement comes when the pit is profitable and we need to know how much of that profit will be shared with the workforce.''

Meanwhile, the investment in the colliery is only a fraction of the amount the Russians and Mr Budge are putting into building a new power station alongside it. Originally this was expected to cost them £800m, a figure that has already crept closer to £1bn. The project has passed all the necessary bureaucratic hurdles: it has planning permission, a government licence, and an agreement to supply the national grid. The plan is that it will be generating electricity by 2012.

While the power station will burn coal, unlike other older coal-fired stations, it will not be pouring huge quantities of carbon dioxide and sulphur into the atmosphere. Those gases will be extracted before the fuel is burnt, and will be pumped in liquid form for up to 400 miles to the oil and gas fields under the North Sea. In that way it makes an important contribution to solving one of the government's big dilemmas - how to keep the UK supplied with cheap energy and at the same time cut emissions of greenhouse gases.

Richard Budge has an almost messianic belief in clean coal as the fuel of the future. "Clean coal costs only two-thirds of the cost of wind power. Wind farms are ugly, but that's not a reason for not building them. The reason is they are ineffective. Wind farms only work one day in three, and you don't even know which day. Every time the wind doesn't blow, gas stations take up the merit order.

"You probably generate more in emissions on the days when the wind farms aren't working than you would if you just relied on gas. It is obvious that you need a mix of energy sources - gas, nuclear and coal - and the coal will have to be clean," he said.

The third and final part of the Hatfield project will be a large industrial part. Some of the sites are already up for sale. By next year it should cover 140 acres. An irony behind the story is that one reason the government is so anxious to open up indigenous sources of energy, such as coal from British pits or new nuclear reactors, is the fear that without them, the UK will be too dependent on gas imported from Russia. In this instance, Russian money is helping wean the UK off its dependence on Russian gas.

But there will be 150 jobs in the new power station. When the pit is fully operating its workforce will be 350. There are 500 construction jobs on site, and perhaps another 2,000 will eventually be employed in the industrial part. In this part of South Yorkshire that was so badly hit by pit closures, the locals have very good reason to be glad the Russians are coming.

(By Andy McSmith, The Independent, 02/08/2007)