ATH Resources predicts fall in sales volumes, and says it will register for carbon reduction scheme

COAL producer ATH Resources said its annual trading performance is likely to be “substantially below expectations”, with sales volumes predicted to fall.

The Doncaster-based miner also said it has decided to go ahead with registering to participate in the Government’s Carbon Reduction Commitment Scheme.

It has previously attempted to remove itself from the scheme. The CRC is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large public and private sector organisations, which are estimated to be responsible for around 10 per cent of the UK’s emissions.

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It said that whilst the group is “now cautiously optimistic” that the Carbon Reduction Commitment Scheme will be abolished this autumn following the Chancellor’s recent Budget statement, it has decided to proceed in registering its participation within the scheme to avoid incurring any penalties should the group ultimately have to participate in the scheme.

The latest estimate of the cost of participation to the group could be around £1.1m for each of the three years from April 2012, £300,000 per annum lower than previous estimates, it said. If the scheme is not abolished but is implemented in its current draft form, the group intends to take its appeal to judicial review.

The firm made the statement in a trading update ahead if its interim results for the six months to April 1, 2012. The group said its sales volumes for the first six months of the year are expected to be approximately 790,000 tonnes, 12 per cent ahead of the same period last year.

The group said it was affected by the continued rise in gas oil prices, combined with a weakening international price of coal, in the first half.

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In a statement it said: “In recent weeks the group’s sales of high margin domestic product have not recovered from the low demand due to the mild winter and are unlikely to pick up in the remainder of the year given the high stock levels being held by customers.

“In addition, the group has begun to experience a much higher level of old workings than previously encountered in the final phase of mining at its Muir Dean site.”

If this situation continues throughout the remaining life of the mine to the end of September 2012, it said total annual expected sales volumes for the group will fall to approximately 1.65m tonnes, slightly below last year’s total of 1.67m tonnes.  The company said: “Together, these issues are expected to result in a loss of revenues for the remainder of the year of over £4m and the loss of reserves will also likely lead to an exceptional write down of deferred (non-cash) stripping costs (work in progress) of approximately £2m.”

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