News: Hargreaves propose mothballing of Maltby Colliery in Rotherham
The board of Hargreaves Services plc, the UK's leading supplier of solid fuels, has announced its proposals to mothball Maltby Colliery in Rotherham.
Maltby occupies a site of 500 acres and employs over 500 staff and contractors. It is the last coking coal mine left in the UK and produces both high quality coking coal and power station coal. The colliery produces more than 1 million tonnes of coal per year.
Staff were notified of potential redundancies last month as experts carried out a comprehensive review into the problems with mining a new panel.
Hargreaves invested millions in work to mine a new panel, called T125, where coal is expected to be approximately 25% thicker. However conditions never before encountered at the 100 year old mine meant that further development was abandoned.
Now, geological reports indicate that the risks associated with mining the panel have not significantly reduced and that the panel is not viable on health & safety, geological, and financial grounds.
A statement said that: "Consequently the Board is proposing that T125 will not be mined and that the mine will be mothballed.
"Regrettably, the Board's proposal inevitably means that all employees working at Maltby Colliery continue to be at risk of redundancy.
"In the event that redundancies are necessary, the Company remains committed to exploring alternative employment opportunities for staff.
"The Board will continue to consult with employees and trade union representatives regarding its proposals.
"The Board has considered alternative mining plans and options. Although no viable alternative strategic options have been identified by the Board at this time, as part of this ongoing consultation process the Board will offer the opportunity to employees and trade union representatives to table alternative proposals.
"The Board will continue to make information regarding the health and safety hazards, geological risks and the financial data available to trade union representatives.
"Management remain committed to conducting a fair and meaningful consultation and will continue to make themselves available to meet with trade union representatives to further discuss any proposals."
The delay caused by the geological problems would have resulted in a gap in production between the current seam finishing in October and work on the new seam starting, estimated at around 15 weeks, which could have an impact on the group's profit in the year ending May 31 2013 of between £12m and £16m.
When Hargreaves acquired the site in 2007 for £21.5m, they intended to keep the colliery open to 2015 and this end date was subsequently extended to 2017.
Feasibility studies then extended the mine's life to 2025 at current output levels.
In 2010 Hargreaves completed a change to a new face at Maltby but performance was a disappointment despite the investment. In 2011, new working practices and major equipment issues were resolved and a fifth shift was introduced employing 70 extra miners.
For the year ending May 31 2012, Hargreaves Services reported pre-tax profits of £43.1m for the year, up 16.8% on the previous year. Turnover increased 24.6% to £688.3m.
Hargreaves Services website
Images: Hargreaves Services
Maltby occupies a site of 500 acres and employs over 500 staff and contractors. It is the last coking coal mine left in the UK and produces both high quality coking coal and power station coal. The colliery produces more than 1 million tonnes of coal per year.
Staff were notified of potential redundancies last month as experts carried out a comprehensive review into the problems with mining a new panel.
Hargreaves invested millions in work to mine a new panel, called T125, where coal is expected to be approximately 25% thicker. However conditions never before encountered at the 100 year old mine meant that further development was abandoned.
Now, geological reports indicate that the risks associated with mining the panel have not significantly reduced and that the panel is not viable on health & safety, geological, and financial grounds.
A statement said that: "Consequently the Board is proposing that T125 will not be mined and that the mine will be mothballed.
"Regrettably, the Board's proposal inevitably means that all employees working at Maltby Colliery continue to be at risk of redundancy.
"In the event that redundancies are necessary, the Company remains committed to exploring alternative employment opportunities for staff.
"The Board will continue to consult with employees and trade union representatives regarding its proposals.
"The Board has considered alternative mining plans and options. Although no viable alternative strategic options have been identified by the Board at this time, as part of this ongoing consultation process the Board will offer the opportunity to employees and trade union representatives to table alternative proposals.
"The Board will continue to make information regarding the health and safety hazards, geological risks and the financial data available to trade union representatives.
"Management remain committed to conducting a fair and meaningful consultation and will continue to make themselves available to meet with trade union representatives to further discuss any proposals."
The delay caused by the geological problems would have resulted in a gap in production between the current seam finishing in October and work on the new seam starting, estimated at around 15 weeks, which could have an impact on the group's profit in the year ending May 31 2013 of between £12m and £16m.
When Hargreaves acquired the site in 2007 for £21.5m, they intended to keep the colliery open to 2015 and this end date was subsequently extended to 2017.
Feasibility studies then extended the mine's life to 2025 at current output levels.
In 2010 Hargreaves completed a change to a new face at Maltby but performance was a disappointment despite the investment. In 2011, new working practices and major equipment issues were resolved and a fifth shift was introduced employing 70 extra miners.
For the year ending May 31 2012, Hargreaves Services reported pre-tax profits of £43.1m for the year, up 16.8% on the previous year. Turnover increased 24.6% to £688.3m.
Hargreaves Services website
Images: Hargreaves Services
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