SHARES in coal miner ATH Resources plunged yesterday after the company issued a profits warning.
The Doncaster-based group blamed a 21 per cent fall in international coal prices since the start of the year and geological problems at its Muir Dean mine.
The group said that sales volumes this year are unlikely to exceed 1.6 million tonnes.
ATH said that while it has negotiated a “significant improvement” to its two remaining legacy contracts and entered into new fixed price contracts at prices well above those currently available, further reserve losses at Muir Dean and reduced demand and pricing have wiped out any gains.
It added that the ongoing weakening of international coal prices continues to hit group income and commodity markets forecast this trend will continue.
The company said it is reviewing its mining plans in order to maximise cash generation. New sites will continue to be developed through the planning process, although openings may be delayed and capital expenditure kept to a minimum whilst coal prices remain subdued.
ATH said the Environment Agency has told the group that it will have to purchase Carbon Credits totalling £1.1m per year in July 2012 and July 2013.
ATH has lodged an application for a judicial review of the Government’s Carbon Reduction Commitment Scheme.
It added that the £1.1m a year would be reclaimable if the appeal is successful.
The group’s shares fell xp to xp.