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This morning, the East Ayrshire Council Cabinet will meet to discuss an initial report into the state of the opencast coal mining industry. The report, published yesterday by the Council, highlights publicly for the first time the scale of failings on the part of Scottish Coal and ATH Resources in fulfilling their obligations both to restore sites but also to adhere to the planning conditions imposed by the Council. The report is also a damning indictment of the local authority’s failure to adequately enforce and monitor the conditions it imposed.

Most significantly, the report reveals that only £16.1 million are held in Scottish Coal restoration bonds and £11.525 million in ATH/Ardvark bonds [1], whereas liquidators KPMG estimate restoration costs at between £48 and £90 million between the two companies [2]. This estimate is unverified, and there is still no estimate for many former opencast sites in the area as the Council are still concluding their investigations. Further still, there are sites with no bonds in place and there is huge uncertainty as to whether the bonds that are in place will actually be paid out.

The restoration bombshell has finally been dropped: in East Ayrshire alone the shortfall could be up to £60 million. What about South Lanarkshire, North Lanarkshire, Fife and other areas? We’re looking at a £100 million bill that will be dumped on the public purse.

The mining companies have failed in their statutory obligations, but local authorities should have been enforcing the planning rules, and in this they have failed tragically. East Ayrshire Council are to blame as well as Scottish Coal and ATH Resources.

The document released by East Ayrshire Council also reveals that their legal counsel has been instructed to challenge Scottish Coal’s winding up petition over issues of abandonment of sites, and that KPMG, liquidators also acting for ATH Resources, want to abandon at least three former ATH sites in addition to the Scottish Coal sites [3].

The report highlights various failings to comply with legal agreements signed by the Council, mining companies and landowners, such as the requirement to hold regular liaison and Technical Working Group meetings. Further still, the report highlights the fact that a quarter of a million pounds has not been paid into the Minerals Trust in Ayrshire. [4]

67128172_coal624The document also calls for a full independent review of the opencast mining industry by saying “it will be necessary to fully review all of the processes and procedures around the management, determination, implementation, monitoring and review of the planning processes in relation to opencast coal operations within East Ayrshire, all within the governance arrangements in place throughout the period.”

Coal Action Scotland believes that a full public inquiry to fully comprehend the failings that contributed to the state that the industry now finds itself in is necessary before any operations can be resumed, and before a monopoly in the industry is created by allowing Hargreves Services to cherry-pick sites.

Over the past 10 to 15 years local authorities such as East Ayrshire and South Lanarkshire Councils have had far too cosy a relationship with the mining companies, issuing consent after consent, and failing miserably in their enforcement and monitoring obligations. Now the stark reality of what this industry has done to communities and the countryside is hitting them square on.

It is also important to acknowledge that this missing £100 million is where Scottish Coal and ATH bosses have made their money – by saving costs on restoration that they should have been doing progressively, the industry boomed when the times were good, and now both have gone bust and are walking away from their liabilities. In effect, Scotland will be subsidising the irresponsible actions of mining bosses to the tune of £100 million.

Notes:

[1] Para 61 of the report
[2] Para 60 of the report
[3] Para 68 of the report
[4] Para 113 of the report

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2 Responses to “The restoration bombshell has finally been dropped”

  1. 1 Public Interest

    In response to the latest debacle surrounding ATH and Scottish Coal I offer the following comments

    It is extremely doubtful if any opencast mines with a vertical strip ratio in excess of ten to one can operate and provide a profit margin.

    The reasons for this unprofitably are the low price of thermal coal and the high cost of gas oil.

    The only way a profit can be generated from opencast coal mining in today’s climate of low coal prices and high gas oil price is to carry out no restoration task after mining and leave the final void open and the over burden dumps as deposited.

    Therefor if this practice of failing to restore sites by the mining company’s is unacceptable, then a independent analysis needs to be carried out to determine the actual and total restoration costs per site and a bond of this amount must be raised by the mining company before the mining licences is granted.

    Any operational mines must also comply to the same conditions i.e. independent analysis to determine the restoration costs and the provision of a bond to cover the restoration task, the costs associated with this analysis must be met by the mining company’s.

    It is highly unlikely that either of the two company’s ATH or Scottish Coal were ignorant to the fact that the mining operations they were carrying out would generate sufficient profit margin to carry out the restoration task.

    If the envisaged cost of between 50 and a 100 million to carry out the restoration task left by these two company’s is correct then one must ask how many sustainable jobs would this amount of money have created in Ayrshire and Lanarkshire.

  2. 2 Billy Wallace

    Ex Scottish Coal workers should bear in mind that if the government/councils had enforced the progressive restoration, as they were duty and morally bound to do, every last worker would still be in employment now, and for a good few years in the future. Scottish Coal (not a Scottish company by the way) walked away with the restoration money, courtesy of a little help from KPMG and government. When they should have been spending some of their profit on restoration,and keeping workers in employment, they were allowed to just keep chasing the coal profit. No profit for Cornes and Co in restoration you see. The soon to be enlarged restoration estimates for these open-casts entirely consists the money that should have kept the jobs going doing the proper restoration. The SNP government is spinning this now a Westminster attack on the coal industry regarding the proposed rail tax hike. They have got to be joking surely? ATH and Scottish coal failed before and without the rail tax hike and promised restoration. KPMG using English case law in a Scottish court to enable them to walk away from their restoration responsibilities?
    Messing up our Scottish landscape to supply English power-stations.
    I can see the SNP ” vote yes campaign ” having to evolve now..

    You Can Take our Coal, Destroy our Landscapes, But You’ll Never Take Our Freedom…


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