Estimated losses on producing deep mined coal between 2000 and 2008 stand at nearly £167m. Estimated profits on its surface mined coal for the same period stand at £54.7m. The net loss on its coal operations over the last 8 years is estimated to be over £110m.
A new deep mine development is unlikely without a public subsidy. Estimated cost was put at between £300 -£350m in 2004.
All of UK Coal plc’s remaining deep mines, with the exception of Daw Mill could be closed by the end of this decade.
UK Coal plc it will only be able to maintain its role as the major supplier of coal if it greatly increases its number of successful opencast mine applications. Thus meeting the UK’s indigenous energy security needs become dependent on more and more opencast coal. This analysis is borne out by looking at UK Coal plc’s plans for new opencast mine applications.
It is probably the company’s re-invention of itself as a ‘Property Company’ which has kept the company viable.
SECTION 4: THE REINVENTION OF UK COAL plc AS A PROPERTY COMPANY
On the 7th November 2006 UK Coal plc held a Property Portfolio Presentation on ‘Project Worth’, which explained UK Coal plc’s ambitions to be taken seriously as a property company rather than as a mining / energy producer. 1 The presentation was about how UK Coal plc intended to develop its land bank.
At the start of the presentation reference was made to this being
“One of the largest brownfield value opportunities in the UK today”.
Included in this presentation about ‘brownfield’ sites are the examples of Cutacre and Lounge, which will be discussed further in the next section. It may be that none of the Cutacre site is technically a brown field site and certainly none of the Lounge site is, as the following case study section makes clear. It was prudent of UK Coal plc to conclude this presentation with a disclaimer which included the following
“this presentation contains estimates, projections, targets, or forecasts which have been prepared by the management of UK Coal plc and involved significant elements of subjective judgement which may or may not be correct..” 1
However, since then, in its Annual Reports and on the company’s web site it has constantly associated ‘Project Worth’ with ‘brownfield’ site redevelopment.
UK COAL plc: AN ALTERNATIVE REPORTPAGE 14