Thursday, 18 December 2014


When in comes to mining, the people of Wales (and elsewhere) can be said to have paid in full and paid in blood. Coal owners and redevelopers promises can be said to be cheap e.g. I will still respect you in the morning, there are 6,000 jobs related to this development, we will restore the landscape after the open coal mining is finished, etc. That said in both Wales and Scotland (and no doubt other former coal mining areas) the promises in relation to afterwards were no doubt laid on thick.

The actions of a judge who in relation to the responsibility for clearing up afterwards should alarm those communities who are living with on-going open cast coal minin operations or like the residents of north Torfaen have potentially this experience yet to come. The case, which revolved around the collapse of a fraud case also indirectly relates to whether or not a mining firm should accept moral responsibility for restoring two opencast sites.

The Serious Fraud Office had accused six people, including two former directors of the firm, of trying to avoid paying the restoration costs. Celtic Energy transferred ownership of mines at Margam, near Port Talbot, and East Pit in Amman Valley to a firm in the Caribbean. Basically the Judge ruled nothing unlawful had taken place and an attempt to re-open the case back in October failed. When coal extraction ceases companies are obliged to restore opencast sites.

The cost of reinstating the two Welsh sites has been estimated to be around £150m, but less than £10m has been set aside so far. The owner, Oak Regeneration, which just happens to be listed in the British Virgin Islands, says it cannot meet the restoration costs and Neath Port Talbot (NPT) council said it understands the company would go into liquidation if it tried to force payment.

Restoration, after years or noise and pollution, is often linked to questionable post coal extraction developments. Certainly Oak Regeneration has plans on both sites, which include housing at Margam and a hotel at East Pit. As elsewhere, both plans relate to yet more mining, something which has provoked strong local opposition in the past.

Now, none of this should be news - taxpayers (in Scotland) may also be left to carry the can as they may have to cover as much as £62m pounds to restore opencast mines in East Ayrshire should make more than a few people sit up and think. An East Ayrshire Council report written after the collapse of Scottish Coal and Aardvark (TMC) reported that there was not enough money set aside to pay for remedial work to restore the mining sites.

Restoration bonds put up in place to pay for the post open cast mining clear were revealed to be significantly less than the projected cost of the restoration work.Coal Action Scotland campaigners are understandably angered and have accused the council of basically failing to enforce and monitor its own rules. After the financial collapse of both companies, liquidators from KPMG were appointed at Scottish Coal in April and at Aardvark in May.

Aside from lost local jobs, East Ayrshire Council have been examining who will have to pay for cleaning up various opencast sites which were previously operated by the open cast coal mining firms. A report to the council's cabinet in May stated that KPMG estimated that total restoration costs for the East Ayrshire sites were "in the region of £48m to £90m".

The East Ayrshire Council council report noted that the potential value of restoration bonds, which are effectively insurance policies for cleaning up the mines after mining has ceased, were worth around £ 16.1 million pounds for Scottish sites and £ 11.52 million pounds for Aardvark sites. 

Back in 2013 the world market for coal was being flooded by cheap US coal as a knock on effect of the collapse of US gas prices due to fracking. Quite how coal prices will fare in a time (however temporary) when oil prices are crashing is as yet an unknown. When it comes to open cast mining and the post mining clear up operations, the time is long overdue for serious questions to be asked of the pen cast mining companies and their promises.

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