Durham-based Hargreaves Services, one of the largest remaining operators of surface mines in the UK, told investors on Tuesday that it plans to wind down its UK mining operations in line with its long-term strategic plans.
Hargreaves, which can trace its roots back 150 years, runs a string of formerly abandoned coal sites across Scotland and continues to supply British power plants and steelworks with coal imports via the ports of Immingham and Newport.
“The company does not intend to mine coal elsewhere as it is clear that coal has a limited future, as is reflected in the governments policy statement. The groups focus is on developing Hargreaves Land, its property development business, and on its other businesses in distribution and services,” the spokesman added.
Hargreaves decision to end its long association with coal mining operations will lead to a £3.7m financial blow for the firm, including a £1m charge for employment-related liabilities and a £2.7m writedown on its assets.
Around 100 workers at the Scottish mines have been offered potential new opportunities elsewhere in the company and they will be kept informed, said a company spokesman.
Hargreaves said it would continue to distribute its remaining coal stocks to cement works, sugar factories and other specialist industrial coal users, which could take between 18 months to two years to clear entirely.
Britains total demand for coal fell to 7.9m tonnes last year, down by a third from the year before after power plant demand fell by 56% to a record low of 2.9m tonnes.
The governments official figures revealed that coal-fired power accounted for just 2% of the UKs electricity generation in 2019, the lowest share since 1882, after meeting 40% of the UKs electricity needs as recently as 2012.
Shares in the London-listed company, which was once worth about £400m, were trading at 195p on Tuesday, down from highs of 1258p a share in 2012 before the governments carbon tax came into effect in 2013. Since then, the company has been hit by a string of UK coal-fired power plant shutdowns and the collapse of British Steel, one of its key customers.
The end of Hargreaves coalmining business is likely to raise fresh doubts over plans put forward by the Banks Group, another Durham-based infrastructure firm, to develop the UKs largest opencast mine to serve Britains steel and cement sector.
Ministers were expected to make a decision on whether the controversial project can move ahead in April, after four years of fierce opposition from those who believe the mines environmental impact would outweigh its economic benefits.