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Just tom keep you up to date with whats happening, I tweeted this earlier today: Just checked with #LeicestershireCountyCouncil - #HarworthEstates still owes them £700,000 for the #Minorca #Opencast #coal site
Just to keep you all abreast of a little problem Harworth Estates is having with Leicestershire County Council (LCC) over the non payment of a £700,000 debt. Here are two news items on the topic to begin with: ‘MINORCA: Formal action due in Measham payment delay’ (Burton Mail, 8/12/14) @ http://www.burtonmail.co.uk/MINORCA-Formal-action-Measham-payment-delay/story-25400759-detail/story.html Leicestershire County Council (LCC) have still not received the outstanding payment of £700,000 for the Minorca Restoration bond and therefore are still proposing to take formal action to recover the money from Harworth Estates at Thursday’s meeting of LCC’s Development Control and Regulatory Board. ‘Councillors consider enforcement action over delayed £700,000 open cast coal mine 'restoration' payments’ (Leicester Mercury, 10/12/14) @ http://www.leicestermercury.co.uk/Councillors-consider-enforcement-action-delayed/story-25530748-detail/story.html Another story on whether Harworth Estates have yet paid their £700,000 and the answer is no but it’s coming........soon. “...Iain Thomson, partnerships manager for Harworth Estates, said the firm was aware of tomorrow’s council meeting. He said: “As the freehold landowner of the Minorca site, Harworth Estates has an obligation to restore the site once surface mining operations end. “We’re continuing to work hard to support operations on the site, for the benefit of local employees and the wider community, with this obligation in mind.” The latest news is that after LCC's Regulatory Control and Development Board meeting yesterday as no payment has been made LCC are going to take legal steps to recover the £700,000.
As this forum continues to debate the future prospects of this Company and much of this discussion concerns the future of coal and the price of coal, here are some recent, gloomy, predictions to consider from Reuters and Merrill Lynch: ‘Thermal coal prices to drop further on oversupply, weak demand’ (Reuters, 20/3/14) @ http://www.reuters.com/article/2014/03/20/energy-coal-prices-idUSL6N0MH30Y20140320?rpc=401&feedType=RSS&feedName=rbssEnergyNews&rpc=401 ‘ “Maximum coal burn” to continue in Europe’ (Responding to Climate Change, 20/3/14) @ http://www.rtcc.org/2014/03/21/maximum-coal-burn-to-continue-in-europe-says-merrill-lynch/ Both predict a fall in coal prices for the forseeable future and with current prices hovering around £45.60 yesterday it does not look good. When Scottish Coal went bust the coal price was c £53. Hargreaves should be more transparent when they finally report their annual figures and allow shareholders to compare their opencast operating / production costs with the price the coal has been sold at. Before UK Coal went bust this info was always reported both for the deep mines and the surface mines.
The price of ARA Coal (coal shipper to N.W. Europe and therefore near the UK spot price) has slipped from c £67 in January 2013 to c£47 by Thursday last week. ATH Resources and Scottish Coal went bust when the coal price was c £60. Any views about what this decline in coal prices might mean for HSP?
There has been some chatter here on the future fortunes of the UK Coal Industry. If you want to read a free analysis of the future of the UK Coal Industry, based on figures / statements provided by the Department of Energy and Climate Change, Michael Fallon, The Energy Secretary and the Coal Authority then download 'Assessing the Need for Coal' (21pgs, 12 References) (Jan 2014) from: http://coalaction.org.uk/wp-content/uploads/2014/01/Finak-C1-ASSESSING-THE-NEED-FOR-COAL.pdf This summarises the current situation. However things may be changed by the Budget as various groups, the Coal Forum, the Carbon Capture and Storage Association and the TUC amongst others, have been lobbying hard to be allowed to continue by means of the subsidy system in the new Energy Act and by means of freezing any more increases in the Carbon Floor Price / Carbon Tax to ensure that some of the existing coal fired power stations have a longer life than anticipated. This would result in more Carbon Dioxide emissions , Acid Rain Sulphur Dioxide emissions, various Nitrous Oxide emissions associated with causing premature death let alone more environmental damage caused by opencast mines. On the latter point Scotland has 32 un-restored opencast mines that will cost the taxpayer,it seems ,c£200m to restore and in Wales, the estimated cost of restoring just one site, East Pit, is £115m. Such is the nature of the industry you are investing in if you hold shares in this Company.
I've posted on this company and its predecessor UK Coal many times about its property interests. Before people get carried away about Coalfield Resources being a simple property play, they should read what I have just had posted on a Yorkshire Post news item about Coalfield Resources: "Coalfield Resources aiming to concentrate on property investments" @ http://www.yorkshirepost.co.uk/business/business-news/coalfield-resources-aiming-to-focus-on-property-investments-1-5957685 "I would argue that this news report misrepresents the property portfolio of this Company, when it claims that it want to concentrate on redeveloping 'former coalfield land' implying that it is concerned to develop former deep mine sites. This may be true in some cases, but further research produces a different picture about what the bulk of this land is and what 'development' may mean for it. The company recently produced a prospectus in support of its attempts to raise £5m. In it, it states that it has a 30,000 acre estate, of which 20,000 acres are agricultural land, some of which contains 'minerals'. Looking further back, to the last annual report produced for UK Coal plc in 2011, this company's predecessor, it showed that these 'minerals' were nearly 78m tonnes of surface mineable coal. The question then that needs to be asked is whether, for this 'former coalfield land' development will mean seeking planning permission to exploit these coal reserves. This will be a much more long drawn out process that redeveloping brownfield land, which will meet with local opposition, as witnessed currently where all former UK Coal planning proposals for new opencast sites are opposed by local groups." For those of you thinking of taking up the placement offer, look at my previous posts on this issue, check the prospectus to see whether there is any mention of coal (p 71 is the best place) and ask questions of the management about where the 78m tonnes of coal mentioned in UK Coal's 2011 Annual Report has gone. If it is still counted as an asset, why not mention it in the prospectus?
My point is not about coal production as such and I agree with your analysis about the restructuring. However, to realise the potential value of the property portfolio of Harworth Co will, I believe, for some of the portfolio, depend on gaining permission for new surface mines. According to current planning policy, no other development can take place on land where there are coal deposits amenable to surface mining until the coal has been extracted. That is why coal still matters to Coalfield Resources. What proportion of the portfolio this will apply to remains far from clear. That is the point I'm making. What also needs to be made clear is what proportion of the portfolio that is brownfield land this applies to and what proportion that is greenfield land this applies to. In the latter case, gaining planning permission to extract the coal is only for temporary use of the land subject to the site being restored to its original condition and land use. It is not defined in planning terms as brownfield land which is treated differently by the planning system.
I beg to differ over whether Coalfield Resources does or does not have an interest in Coal. Yes the restructuring has insulated the property side of the old UK Coal Company from debts incurred by the deep mines. However, what is not clear is whether a significant part of the Coalfield Resources landbank is held because it was assumed it had development potential as a future surface mine site. If that is the case, then time to develop this land for surface mining purposes is fast running out as the coal fired power stations get switched off, one by one. Any investor in this Company needs to research this carefully or if you are already an investor ask questions on this possibility of the Directors. Two clues on why this might be the case. The Minorca Surface Mine Site is owned by Coalfield Resources but worked by UK Coal Surface Mining. Secondly the Directors have stated that it will take a long time to realise the value in the remaining estate. Has this anything to do with how long it takes to get planning permission for new surface mines? It can take years - the Bradley site in Co Durham entered the planning process in 2008 and a decision on it is still awaited.
A fire broke out at Daw Mill Colliery on Firday 22/2/13. This is a link to the official press release Major Underground Fire at Daw Mill @ http://www.ukcoal.com/latest-news/news/Major_underground_fire_at_Daw_Mill_Colliery
More land sales reported - and these land sales are on sites where planning permission is still being sought for opencast sites!! See: For the Hoods Close site see: http://www.thenorthernecho.co.uk/news/10233676.Opencast_plan_still_stands_despite_sale_of_land/?ref=rss For the Bradley site see: http://www.thenorthernecho.co.uk/news/10233676.Opencast_plan_still_stands_despite_sale_of_land/?ref=rss Is this a fire sale or what?