Fri, 10 Dec 2010

KPMG administrators called in at mining business

Powerfuel, which owns Hatfield Colliery, has fallen into administration after failing to raise enough cash to undertake upgrade and expansion plans.

The firm, which employs 380 people, needed to raise £635 million to develop the UK’s first clean coal plant. It also required £30 million to carry out upgrade works to the Hatfield mine. KPMG has been called in as administrators for the firm, and is hoping to secure a buyer to protect the jobs at the mine and the clean coal works.

The financial problems arose after the 51 per cent shareholders, Russia’s second largest coal firm KRU, decided it could not afford to put any more funding into the business.

The business planned to develop the £800 million clean coal plant after using a £164 million of European Union funding to carry out carbon capture and storage technology development work. However, it failed to raise the rest of the money needed to complete the project.

KPMG administrator Richard Fleming explained, "The central goal of the administration is to sell the share capital of the mining and carbon capture and storage (CCS) development project which sits in Powerfuel, the parent company."

"The day-to-day business of both Powerfuel Mining and Powerfuel Power will not be affected by the sales process,"

The National Union of Mineworkers will be seeking a meeting with the administrators as a matter of urgency to ensure the future employment of our members at the Colliery.