THE MINORCA OPENCAST PROTEST GROUP HAS PUBLISHED A REPORT ON UK COAL plc ON 10/3/10. DETAILS OF THE REPORT AND HOW TO DOWNLOAD A FREE COPY ARE DETAILED BELOW.                                                            

OUTLINE OF MOPG’s 3^rd RESEARCH REPORT “UK COAL: AN ALTERMATIVE REPORT”  

SUMMARY OF THE REPORT

This report reviews the recent history of UK Coal plc’s mining operations and details the overall estimated accumulated losses it has accrued in this area of its activities between 2000 and 2008. Attention then switches to a critical assessment of UK Coal’s representation of its land bank being mainly ‘brownfield’ land. Lastly, after presenting three case studies that show UK Coal’s attempts to develop its land often meets serious and sometimes successful resistance from local communities the report reaches a number of conclusions.

REPORTS CONTENTS

Reasons for the Report, A Brief Review of UK Coal Policy 1989 -2008, Past, Current and Future Trends in UK Coal plc’s Coal Production, The Reinvention of UK Coal plc as a Property Company (this section warns future communities facing an opencast mining application that UK Coal plc may have long term plans to permanently alter the land use of ex opencast sites),   Case Studies on Conflicts Caused by UK Coal plc use of the Planning System at Cutacre in Bolton, Lounge near Ashby de la  Zouch and Rossington in Sth Yorkshire, Current Issues and Concluding Comments and Conclusions.

REASONS FOR THE REPORT

This report was drafted before the news was released about the possible merger between UK Coal plc and Hargreaves Services. This news, plus the heightened interest being shown in UK Coal plc makes the content of this report relevant to the public in general, even though this report was initially written for a different audience.

Groups and organisations opposing opencast mining in the UK are often finding themselves pitted against UK Coal plc, the country’s largest coal producer. It is partly because this coal producer has such a pivotal role in fulfilling the need, as assessed by the Government, of providing the UK with part of its energy security that this report has been written. This report attempts a deeper analysis of the company’s trends for past, present and future coal production. The report also investigates arguments that the company is more concerned to develop its property portfolio that to mine coal. 

Secondly this company presents itself as carrying the banner of Britain’s deep mining tradition and as a caring organisation which only seems to extract opencast coal as a consequence of restoring brown field sites left over from the glory days of the coal industry. This company then, is a force for good, for environmental improvement, a point it stresses time and time again in planning applications for new opencast mines and in its publicity. However, this alternative report contends that:

·         The future of this company as a long term deep mine coal producer is questionable.

·         In the future it is going to be increasingly reliant on increasing its surface mine production to meet its contracted targets for coal delivery to generators.

·         In the future is going to be increasingly reliant on gaining planning permission on green field sites and not ex industrial ‘brown field’ sites for new surface mines. This trend is likely to result in more opposition to these proposals from local communities across Britain.

·         The development value of a large part of its extensive estate is dependent on gaining planning permission to extract the underlying reserves of coal first; otherwise the land cannot be developed.

·         Local communities are learning about the use UK Coal plc makes of the planning system in its attempts to convert the temporary use of the land which is allowed for mineral extraction purposes to its permanent use as a land suitable for a range of developments and these communities are increasingly likely to resist such proposals.

Therefore UK Coal plc faces a range of future problems.

In addition, UK Coal plc’s actions to maximise the value of its land holdings has already brought it into conflict with local communities and local authorities. Three of these current conflicts are included in the report. This report is intended for all those who have an interest in UK Coal plc either now or in the future, especially those who will find themselves opposing UK Coal’s current and future planning applications. Lastly this report reviews the current financial position of UK Coal plc.

THE REPORTS CONCLUSIONS

Conclusions from Section 3: Past, Current and Future Trends in UK Coal plc’s Coal Production :

·         UK Coal plc’s coal production has fallen by 58% between 2000 and 2008.

·         It now only operating 4 deep mines, one of which will close this year.

·         Estimated losses on producing deep mined coal between 2000 and 2008 stand at nearly £167m. Estimated profits on its surface mined coal for the same period stand at £54.7m. The net loss on its coal operations over the last 8 years is estimated to be over £110m.

·         A new deep mine development is unlikely without a public subsidy. Estimated cost was put at between £300 -£350m in 2004.

·         All of UK Coal plc’s remaining deep mines, with the exception of Daw Mill could be closed by the end of this decade.

·         UK Coal plc it will only be able to maintain its role as the major supplier of coal if it greatly increases its number of successful opencast mine applications. Thus meeting the UK’s indigenous energy security needs become dependent on more and more opencast coal. This analysis is borne out by looking at UK Coal plc’s plans for new opencast mine applications.                                                                        

·         It is probably the company’s re-invention of itself as a ‘Property Company’ which has kept the company viable.

Conclusions from Section 4: The Reinvention of UK Coal plc as a Property Company :

• UK Coal plc, in rebranding itself as a property company, is seeking to enhance the value of its shares as investment analysts  reclassify the company  as a property company rather than being a miner, energy company.
• Applications for coal extraction are determined by different rules from other planning applications. This has been glossed over by UK Coal plc, when it presents itself as a property development company in the following ways:
  • if the unexploited land it owns overlies a shallow coalfield it will be  prevented from developing the land until the coal has been extracted,
  • gaining permission to extract coal is a long complex and expensive process,
  • such planning permission that is granted only gives UK Coal plc temporary permission to exploit the land for mineral extraction purposes on condition that the land is restored to the situation agreed on when the planning permission is granted,
  • land which is approved for such mineral extraction purposes is never classified as brown field land, as UK Coal plc is only ‘borrowing’ the land on a temporary basis and is under an obligation to restore the site,
  • it will take some considerable time for UK Coal plc to realise the value of its land bank since sites are small relative to the size of the land bank and each site can take over 10 years before it is in a position to begin its final development process.
• Future opencast site applications by UK Coal plc, including the Minorca site  may be driven by the strategic location of the site, not just for the value of the minerals it contains but also by its potential longer term vale as a site ‘ripe’ for property development
• In future, groups opposing UK Coal’s plc’s plans for new opencast mines will have to explore the possibility of ensuring that the local mineral authority insists on a bond which would be forfeited if UK Coal plc sought to change the determination of the land before restoration of the site according to the original planning conditions had been completed. Alternatively, such groups may seek a condition which would block any attempt to change the determination of the land for a fixed period after the land had been restored.
• The strategy apparently being pursued by UK Coal plc is likely to create more conflicts with local communities and mineral planning authorities in areas where it operates in the future.

Conclusions from Section 5: Case Studies on Conflicts Caused by UK Coal plc’s Use of the Planning System

·         It seems reasonable to conclude that the conditions that UK Coal plc agree to in order to gain permission to work land for mineral purposes may only be considered by the company as a ‘temporary’ impediment. The real intention to change the designation of the land for planning purposes may be revealed later.

·         These case studies demonstrate how flexible UK Coal plc’s designation of term ‘brownfield’ is. This designation, if unchallenged, may lead to other parties being misled and accepting the definition UK Coal plc ascribe to the land bank ‘under development’ in the Project Worth definition of what is a brown field site.

·         All communities and local authorities in whom UK Coal plc currently operates or seeks to operate should be aware that if UK Coal plc gains temporary permission to exploit a mineral resource, they may afterwards seek to permanently alter the use the land is put to.

Conclusions from Section 6: UK Coal plc: Current Issues and Concluding Comments

• UK Coal plc is still accumulating losses, possible up to £115m for the last financial year.
• This is at a time when the demand for coal for generating purposes is at a low point, with stocks of coal at power stations the highest they have been for 16 years.
• That the ‘material uncertainties’ surrounding UK Coal plc might result in the Government failing to attain its goal of ensuring Economic Security.

A free copy of the 48 page report is available from:

http://www.leicestershirevilla…..ports.html

Report published on 10/3/10