THE LOOSE ANTI OPENCAST NETWORK LAON Press Release 2013 – 31, 7 August 2013
According to various items of news concerning the collapse of UK Coal Operations it has been very much ‘business as usual’ at opencast sites operated by the company UK Coal Production, now the new company operating these sites.
However, a different picture is beginning to emerge over the trail of debt left by its predecessor. The Financial Times reported today that within 48 hours of rejecting a bid,
“UK Coal was liquidated and its assets, except for Daw Mill, had been sold to subsidiaries, with creditors owed £189m expected to receive 7.15p in the pound. The taxpayer, through the Coal Authority, faces millions of pounds in clean-up costs for the Warwickshire pit. Big unsecured creditors include Hargreaves, owed more than £2.6m, and Coalfield Resources, which owns UK Coal’s former property assets after an earlier restructuring, owed £3.7m.”
The report also shows:
The government refused to give an emergency loan because it would have breached European Union state aid rules. HM Revenue & Customs would not allow extra time to pay £12m in tax because of “doubts about the future viability of the company”.
The company sought a loan to cover £24m in redundancy costs from the Redundancy Payments Service but was refused. The mines continue to be lossmaking – an income statement for the four months to April 27, 2013 showed the mines losing £700,000 on £4.2m revenue.
Some £15m of a £30m insurance claim for Daw Mill will be used to pay creditors and the advisers working on the restructuring. The rest has been transferred to the new business.
The Loose Anti Opencast Network can throw more light on which some of the other creditors were, especially the Local Authorities which have been hit:
LOCAL AUTHORITIES AMOUNT (£)
Amber Valley Borough Council 267,687.85
Barnsley MBC 2,310.00
Bolsover District Council 54,007.00
Bolton Council 13,305.75
Chesterfield Borough Council 4,113.00
Derbyshire County Council 195.00
Durham County Council 181,456.50
Leicestershire County Council 619.00
Newark and Sherwood District Council 554,278.52
N.E. Derbyshire District Council 8,694.00
North Warwickshire District Council 50,179.69
Northumberland County Council 621,192.68
Nottinghamshire County Council 321.00
Selby District Council (in total) 610,369.16
Telford and Wrekin Council 110,216.00
Other Public Agencies owed money:
Coal Authority 124,001.61
Environment Agency 421,447.15
HM Revenue and Customs 6,000,000.00
Pension Protection Fund 37,700,000.00
Steve Leary for the Loose Anti Opencast Network said:
“The newly created company UK Coal Production gives the impression that there is nothing to worry about as it continues to exploit coal by gouging out the ground and creating large holes across England’s countryside. But the debt owed to some Local Authorities suggest otherwise.
“For some of the Local Authorities listed, there are no surface mines, but in others, the debt is associated with where opencast mining activity is or has occurred:
Amber Valley (Lodge House Opencast Mine)
Bolton Council (Cutacre, undergoing restoration)
Durham County Council (Eldon Deep, Stoney Heap and Southfield in post restoration care plus opencast mine at Park Wall North)
Northumberland County Council (Maiden’s Hall and Stobswood in post restoration care plus Butterwell and Potland Burn Opencast Mines)
Telford and Wrekin Council (Huntington Lane Opencast Mine)
“The money owed could represent outstanding Business Rates plus contributions to Restoration Bonds or contributions for Community Funds held in Trust by the Local Authority for Section 106 Agreements. At this stage we do not have any breakdown of these figures from the Local Authorities concerned. Questions need to be asked of some Local Authorities on both why such levels of debt were allowed to accumulate and what the figures represent.
“This is a matter of some concern. Communities may be denied some of the promised money for local organisations and at the same time, the Local Authority and all its’ Council Tax payers now find that they have to make up the shortfall in funds plus possibly additional expenses. This is what ‘Business as Usual’ may for unsuspecting members of the public.
“Since this saga started, LAON has been anxious that communities in England would avoid the crisis that has swept the Scottish Opencast Mine Industry this year, with the two major opencast operators going bust, leaving at least 15 large opencast sites un-restored and the Council Tax Payers for one local authority area, East Ayrshire, likely to face a bill of £74m to put matters right.
“Although the failure of UK Coal Operations does not present English Council Tax payers with the same level of costs, it still means costs are involved and that promises used to gain planning permission for many sites in the first place may not be honoured.
“One site in particular is of concern, and that is Potland Burn opencast site in Northumberland. This was worked by a separate company Potland Mining Limited, and it is owed £11, 243, 448 according to the liquidators. This is £11m owed to a relatively small company. Such a level of debt raises a question mark over its survival.
“All these events, in both England and Scotland over coal producing companies collapsing demonstrate the speculative nature of this industry. We should expect more stories of companies collapsing as world coal prices continue to drop. Already this year ,the prices that matter to UK Coal Producers , forward prices for coal for delivery in either 2014 or 2015, have dropped by between 8 and 12%”
References to UK Coal and ‘Business as Usual’ statements
‘UK Coal say it’s “business as usual” for Shortwood Farm plans despite going into administration’ (Nottingham Post 9/7/13) http://www.nottinghampost.com/UK-Coal-say-s-business-usual-Shortwood-Farm-plans/story-19495608-detail/story.html#ixzz2Yd06AbeT
‘Mine jobs near Telford safe as UK Coal in administration’ (Shropshire Star, 9/7/13) http://www.shropshirestar.com/shropshire-business/2013/07/09/mine-jobs-near-telford-safe-as-uk-coal-in-administration/
‘No affect on Measham open cast site despite concerns’ (Burton Mail, 10/7/13) http://www.burtonmail.co.uk/News/No-affect-on-Measham-open-cast-site-despite-concerns-20130710140709.htm
‘UK Coal ploughs on with opencast plan’ (Ilkeston Advertiser, 18/7/13) http://www.ilkestonadvertiser.co.uk/news/ilkeston-news/uk-coal-ploughs-on-with-opencast-plan-1-5859663
‘Pledge issued to restore mine site’ (Leicester Mercury, 2/8/13) http://www.thisisleicestershire.co.uk/Pledge-issued-restore-site/story-19604395-detail/story.html#axzz2apiBg0Ei
‘Business as usual’ at mine after a restructure’ (Burton Mail, 6/8/13) http://www.burtonmail.co.uk/News/Business-as-usual-at-mine-after-a-restructure-20130805114244.htm
Reference to the Financial Times article: “Coal producer rejected mines bid in favour of restructuring” (Financial Times, 7/8/13)http://www.ft.com/cms/s/0/02bc31e2-fea4-11e2-b9b0-00144feabdc0.html#axzz2bCx7B18c
CONTACTING LAON: Steve Leary, LAON’S Co-ordinator, at infoatlaon@yahoo.com You can now follow LAON on twitter @ http://twitter.com/seftonchase