Hargreaves celebrates as group given the go-ahead to open surface mine

Hargreaves said the Well Hill site contains 130,000 tonnes of high quality coal which it plans to extract over a two-year period.

Hargreaves’ chief executive Gordon Banham said: “Although Well Hill is a small project, we are delighted to gain consent for our first site in Northumberland and to start to build on our success with the Tower project in South Wales.”

The news is welcome after Hargreaves said a freak geological fault at Maltby coal mine could knock off as much as £16m from its results next year.

The coal supplier and transporter has pulled back operations at the South Yorkshire coal mine following safety concerns after water, oil and gas seeped into a new section of the mine which it was trying to open up.

Hargreaves’ finance director Iain Cockburn said the group believes the problem will be a one-off.

“All the experts say this is a very unusual anomaly. We’ll get round it by shortening this latest panel,” he said.

He added that the next panel won’t be ready when the current T15 panel finishes in October.

“When you’re not producing any coal, you’re not getting any money.

“We’ll work on the same seam, but it will be in a different location,” he said.

The company estimated that the delays will reduce profits in the twelve months to May 2013 by between £12m and £16m.

Profits in the current year will not be affected and Hargreaves said the incident will not have a material adverse impact on the group’s medium or long-term prospects.

Hargreaves said the development of the new T125 panel was progressing well, but at around 1,900m of advancement in the tailgate section, unusual geological conditions were encountered. Conditions were contained to ensure safe working continued, but seepage levels increased significantly and work was suspen- ded.

Hargreaves said Maltby has never encountered such conditions before and the issue appears to be localised to this section of the mine.