Mining group scores victory over coal site

MINING group ATH Resources has scored a planning victory, allowing it to mine four million tonnes of coal from a Scottish surface mine.

The AIM-listed Doncaster-based opencast miner, which is among the UK's biggest coal producers, said plans for its proposed new Netherton mine in Ayrshire were given the green light by local planning authorities.

The mine will employ 110 people and ATH expects to begin production between October and December.

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Chief executive Tom Allchurch said: "This planning approval ensures not only the long-term continuation of the group's coal production but also generates further employment in East Ayrshire, where we have been a major employer for 12 years now.

"Netherton, which will employ 110 people, is an important cornerstone in the future of our business and the local economy and we are extremely pleased to secure this important planning approval."

The mine is expected to produce coal and about 500,000 tonnes of fireclay for six years. It will be followed by a restoration project lasting up to two years.

Surface mining, a cheaper production method than deep mining, involves the clearing of vegetation and soil and rock overburden, before coal can be accessed. This will be done by mechanical digger and

blasting.

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The Netherton mine is expected to provide wages worth up to 4m annually for local workers. Staff will be transferred from the adjacent Skares Road mine once its coal reserves are exhausted.

The Netherton planning win was in line with analysts' expectations. It follows the recent approval to mine 800,000 tonnes of coal reserves from its nearby Duncanziemuir mine.

The Duncanziemuir mine is an extension to the completed Laigh Glenmuir mine which finished producing coal last year. It is scheduled to begin production in 2011, continuing for four years

The latest approval will be welcome news to the group, after it was hit by another planning hold-up in April, which will dent full-year

trading.

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The group, which is due to announce its interim results tomorrow, said at the time delays to its spoil tip washing project at Langton in Nottinghamshire will set back this year's production target from the site by about 50,000 tonnes.

ATH has been dogged by planning delays in its bid to reclaim about 175,000 tonnes of coal annually over two and a half years at Langton.

Last year, Derbyshire County Council refused planning permission for the scheme, despite approval being received from neighbouring Nottinghamshire County Council. The decision was approved on appeal in November, but the delays meant the group's tip washing arm ATH Regeneration delivered no revenues last year.

ATH then hoped detailed planning would take four weeks, allowing for production to begin by May. But in April it said the project had been delayed by another three months as detailed planning took longer than expected, slightly hitting expectations. All the issues have now been resolved and construction has started.

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ATH supplies coal to power stations including Drax and also has supply agreements with E.ON UK, Scottish Power and EdF.

The group also supplies about 15 per cent of its coal to industrial customers including cement works, sugar processors, schools and hospitals. It is also one of the UK's largest suppliers to the domestic market.

200m flotation for mine giant

Coal miner Scottish Resources Group is to float on the stock market in a deal which could net its owners more than 200m.

The company is mostly owned by investment vehicles Parkburn and Palmaris Capital, who have held their stakes since 1994 when it was created out of the privatisation of British Coal.

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Scottish Resources seeks to raise about 25m in new cash to finance acquisitions and boost its balance sheet, the company said in a statement.

The company will announce a price range by the end of next week and the deal will result in a free float of nearly all the company, which may be valued at up to 250m.

Scottish Resources is the UK's largest surface coal mining company and accounts for 20 per cent of its total coal production.

It has nine operating surface coal mine sites in Scotland, which produced 3.4 million tonnes of coal in the year to March 27, up 12.3 per cent.

It is also working on renewable energy projects in Scotland, seeking to develop seven wind farm sites.