Hargreaves Services, which operates a number of opencast mines in Scotland, as well as coal import operations, will move away from the thermal coal market, the company announced in its most recent results.
“Market conditions in the UK coal and Steel sectors remain very challenging,” said Hargreaves’ Chairman. “Given continuing weak commodity prices, low coal demand and the announcement of further coal station closures, the board has taken the decision to reduce the group’s exposure to thermal coal markets over the next 18 months.”
The company’s decision will see it move to a single mine operation in Scotland that is more focused on servicing the speciality coal markets, as well as the restructuring of its coal import operations to deal with low volumes of thermal coal.
Under the UK government’s energy plan, the country’s remaining coal-fired power plants will be phased out by 2025. In early February, SSE announced it was likely that three our of four units at its Fiddler’s Ferry coal-fired power plant in Cheshire would close by April 2016, while Engie said it was considering closing its Rugely plant in the summer.
This continues a trend of coal plant closures in the UK that has seen significant capacity shuttered over the last 12 months on the back lower gas prices and the UK’s high carbon tax, known as the Carbon Price Floor.
The early closures at Fiddlers Ferry and Rugely would hit Hargreaves’ earnings for the year ending 31 May 2017 and result in redundancy payments of £0.3 million in this financial year, the company said.
Hargreaves reported revenue for the six months to the end of November 2015 of £174.8 million – a slight fall on the previous year’s total of £176.4 million, reflecting lower coal sales from its coal mines and import business. Operating profit was $4.1 million compared with £21.9 million the previous year.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/mining/18022016/hargreaves-to-move-away-from-thermal-coal-2016-269/