Profile - Alistair Black: Coal still king for man running a business and running for fun

THERE cannot be many chief executives who include their running shoes when packing for a business trip.

But Alistair Black, who heads Doncaster-based open-cast mining group ATH Resources, doesn’t do things the conventional way.

Leaving school at 17, Black embarked on a career path that saw him sidestep higher education, but still reach chief executive at the age of 40.

The only interruption to his vocational journey was the MBA he gained at Edinburgh’s Heriot-Watt University in 1999.

“The professor said to me, ‘I will take you on but on the basis that you pass every module’.

“It wasn’t the same for everyone. But of the 130 people on the course, I was one of five who got a distinction.”

Black recalls asking his counterparts on the MBA about their backgrounds.

“There was this fixation, ‘Do you have a degree?’ Eventually, I got to this Chinese girl. She said, ‘No, I’ve got two’. At that point, I gave up.”

Alongside running the group, Black also manages to run about 50 miles a week. He once clocked a 2hr 58min marathon, and often covers seven or eight miles in the evening when staying at a hotel.

“It’s the best stress-reliever you can get. With about 15 minutes’ running your head clears and you can get a good night’s sleep.

“I’m a comfortable 3hr 15min marathon runner but I kill myself to get below the 3hr mark.”

Black, whose father is a brick-layer, joined mining firm Coal Contractors as a trainee engineer on leaving school. It was an uncertain time for graduates, and he opted for the safety of a youth training scheme.

“People were coming out of university and not getting jobs,” he said. “There was mass unemployment. I decided to take the non-conventional route and get a definite career.”

It was a decision he has not regretted. During his 10 years at Coal Contractors, Black climbed the ladder rapidly, and was soon managing men three times his age.

“I was a manager aged 21 dealing with guys in their 50s and 60s. You learn quickly what not to do.”

In 1996, he moved to Rackwood Colliery Company as regional manager, looking after two surface mines and one deep mine.

ATH was formed in 1998 when Tom Allchurch led a management buyout of the rights to operate Skares Road mine, in East Ayrshire. Black joined ATH as operations manager for Skares Road, and became operations director in 2000.

When then chief executive Allchurch and finance director Steven Beaumont last year decided to buy ATH’s regeneration arm and take it private as RecyCoal, it was the perfect opportunity for Black to step up and head the business.

RecyCoal reworks former coal mines, reclaiming tiny coal particles few other companies would bother with.

Black insists ATH is now in much better shape even though it has offloaded the potentially lucrative division – because it has certainty over its finances.

“If they ever did land a (regeneration) project, it was, ‘How are we going to fund it?’ It was completely inconsistent with the business model we had as a group. This is taking it right back to its essential business model.”

With coal prices sky high, Black’s timing could have been perfect. These are good times for coal producers, lifted by soaring Indian and Chinese demand, plus Australia’s floods squeezing supply.

But for ATH, there is the problem of legacy contracts that lie between the group delivering surging profits.

Black won’t point the finger over these – he was on the board in 2005-6 when ATH tied itself into supplying coal at much lower prices, based on projections at the time.

The result has meant that the mining group has been unable to capitalise on the commodity bubble.

“We just never foresaw that there would be such a spike in commodities. We signed tonnage for security. We took a gamble and it didn’t pay off.

“It became difficult to supply these contracts (because) costs were soaring.”

This year, 40 per cent of ATH’s output will go to supplying these loss-making contracts. ATH produced 1.8m tonnes of coal in 2010; it still has 2.3m tonnes of legacy contracts to supply.

The good news is the first of these legacy contracts falls away in March next year. Six months later, the next legacy deal also ends.

And although European and UK regulators are keen to reduce dependence on the dirty fuel, Black can’t see demand slipping any time soon.

“We will see a marked improvement in 2012 to this year and last year. It’s going to keep on going. Energy prices are going to stay high and demand for coal is going to be high as well.

“We’ve still got plenty of market there to supply into.”

ATH’s coal, all of which is mined from sites in Scotland, ends up in the furnaces of Drax, EDF, E-ON and Scottish Power.

Their old power stations are being phased out as the Government tries to cut the UK’s carbon dioxide emissions. Increasingly strict regulations mean new coal-fired power stations must be fitted with carbon capture and storage (CCS) technology.

But despite the clear momentum in favour of cleaning up power generation, Black believes the only way for the UK to keep the lights on is to continue burning coal.

“The world is intent on going down this route of cutting carbon dioxide (emissions) so you have got to go with the flow. But if you accept that burning coal is going to be a problem for the climate, then you have got to do something about it.

“The world is going to burn coal. It’s the most abundant fuel supply in the world.”

The ripples from Japan’s Fukashima nuclear disaster add to his argument.

“It’s a relatively safe technology, it’s safe to transport and it’s cheap.”

And having worked his whole life in the coal industry, it’s little surprise Black approaches the tricky subject of climate change with scepticism.

Black, who reads widely around issues on carbon emissions, greenhouse gases and climate change, believes the climate change lobby has “made a made a bit of a hash” of its campaign.

“I think that the claim that it’s proven beyond doubt is not substantiated. The climate will change but it will change for various reasons, and more effort should be put into mitigating the impact of the change on the population.”

ATH itself is particularly wary about its impact on local communities. In 2007, it opened an eight-mile conveyor belt to transport coal from Glenmuckloch open-cast mine near Kirkconnel, Dumfriesshire, to a railhead in New Cumnock, Ayrshire. The longest conveyor belt in Europe, it claims to save 50,000 lorry journeys a year.

“We’ve a very good relationship with the local community on the back of that. Our development team have a 100 per cent success rate with planning applications.”

The Scot, who lives in Perthshire, admits that many people are bemused by the group’s insistence on maintaining its Doncaster headquarters, but he said the group has no plans to move north.

“We’ve managed for 13 years with a head office in Doncaster and it would be nonsensical to move it elsewhere. Doncaster is the heartland of mining.”

Today, Black sees many young people facing the same dilemma he had in the mid-1980s.

He believes more should opt for the training route, and recently encouraged a friend’s son to consider this as an alternative to university.

“Particularly in mining there’s no substitute to being at the coal face. It was perfect for me.”

Alistair Black

Title: Chief executive, ATH Resources

Date of birth: 17/8/1969

Education: MBA at Heriot-Watt University

First job: Youth trainee with Coal Contractors

Favourite holiday: I’ve been skiing and snowboarding for 20 years

Out of work: Running and golf

Last book read: An Appeal to Reason, by Nigel Lawson

Car driven: Audi A7

Most proud of: Starting out as a trainee and getting to the top