Hargreaves poised to axe loss-making coal mine

ENERGY and logistics group Hargreaves Services said it will make hefty losses from the closure of Maltby coal mine.

The group yesterday confirmed the colliery in South Yorkshire will close by March 2013, which could lead to about 500 job losses.

Hargreaves said the costs of mothballing, redundancies and asset write-offs will hit £65m. Combined with a £10.4m operating loss but offset by £18.1m tax gains, it expects a £57.3m pre-tax loss from its “discontinued operations”.

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Maltby’s closure was forced through tough geology, safety concerns and the falling price of coal. Hargreaves, which 
also manages Hatfield colliery near Doncaster, said it could not find a “viable alternative solution”.

“This has been a very challenging period for the group,” it said.

“The decision to recommend mothballing the mine at Maltby has been a difficult one but the board is confident it is the right decision given the health and safety, geological and financial risks.

“The board also believes that in the longer term the decision will reduce the volatility of the group’s earnings.”

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Earlier this month the firm also revealed “irregularities” in its Belgian subsidiary.

Hargreaves said it has found a new source of coal for its Monckton coke works, which was supplied by Maltby. It will import the coal from the United States.

The company said it is “actively investigating” a number of opportunities to “significantly accelerate” the development of its surface mining.

Fellow surface miner ATH Resources, which mines from pits in Scotland and is based in Doncaster, recently called in administrators who are trying to find a buyer.

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Harvgreaves said production at its Tower surface mine in South Wales has been hit by the “exceptionally poor” weather.

But it is confident production will improve, and said the mine will be a “significant contributor” to profits this year.