Member Article

Update on Rotherham and Doncaster colliery operations

Hargreaves Services plc has reported on the progress of its mothballing of Maltby Colliery in Rotherham, its current surface mining activity there, the redeployment of former miners, and the management of Hatfield Colliery near Doncaster

The information came in the solid fuels supplier’s latest financial results, which essay a “challenging and rewarding year” that included the deactivated Maltby Colliery.

This move was one of the setbacks for the group during the year ending May 31 2013. Overall, the mothballing process led to a reported loss of £59.8 million net, which Hargreaves claims is in line with its plan. Outlay included the operating loss up to the decision to make the mine inoperative; redundancy, closure and settlement costs; and non-cash write offs of plant and equipment, development costs and other related assets.

Maltby is the UK’s last coking coal mine and produced both high quality coking coal and power station coal. Occupying 500 acres, it employed 500 staff and contractors before mothballing was confirmed last December last year.

Hargreaves’ decision was taken because of geological reports on the risks of mining a new panel, meaning that it was unviable on health & safety, geological, and financial grounds.

A number of Maltby miners have since been successfully transferred to Hatfield Colliery near Doncaster, which Hargreaves has managed on behalf of its owners for the last two years. A large number of skilled workers have also been recruited by the group’s contracting arm, Hargreaves Technical Resources. Meanwhile, Maltby continues to trade without underground workings, harvesting and processing approximately one million tonnes of tiny coal particles called “fines” annually.

Hargreaves has also sold the colliery’s methane assets to Alkane Energy in a deal worth £7.5 million. The disposal of Maltby’s plant and equipment is underway and the closure and restoration programme, including the filling and capping of mine shafts, remains on target for completion by the end of the financial year. Hargreaves is also expected to “vigorously defend” any claim from Network Rail following the slip of the Hatfield Colliery spoil heap in February that closed rail lines for five months.

Tim Ross, chairman of Hargreaves Services, said: “It has been both a challenging and rewarding year. Whilst the group suffered setbacks, a successful equity raise in April allowed the group to accelerate the development of its surface mining business to become the key coal producer and distributor in the UK market.”

Despite its problems, which also included a fraud at its Belgium division that cost £49.6 million, Hargreaves’ pre-tax profits still increased to £52.2m, up from £49.2m in 2012.

This was posted in Bdaily's Members' News section by David Gatehouse .