Hargreaves warns over mine delays

The group had hoped for a decision in March, but said while the planning and consultation process has made progress, it now expects this to continue into the summer before any decision.

It said in a statement: “Despite the extended process, management is pleased with the progress being made and will continue to work closely with the local authorities and other interested parties in order to secure a planning decision at the earliest opportunity.”

Hargreaves added it will update shareholders as soon as a decision is made. It previously hoped for permission by the end of 2010.

The group believes there is scope to mine about seven million tonnes of coal from the site, which closed in 2008.

Shares in the group closed down 11p yesterday at 906p.

“(This is) essentially a three-month delay in getting planning approval from this proposed 7m tonne open cast coal mine in Wales,” said analysts at house brokers Royal Bank of Scotland.

“Elsewhere, current trading in line with market forecasts, Hargreaves management believes that with all its existing legacy coal and coke sales contracts set to expire within the next 30 months, there is more than £10m of annual additional production division profitability to accrue from negotiating new sales contracts at near current prevailing market prices.”

Analysts at stockbrokers Charles Stanley maintained a buy recommendation and 1155p target price.