Earth First! Winter Moot

Defending the Douglas Valley

Hambach Forest Ocupation

South Lanarkshire COALcil

Mainshill Zine

Coal in Scotland

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Poniel and HapendonA Scottish Resources Group  (Scottish Coal) press release last week highlighted the companies intention to float on the London stock market by way of an initial public offer (IPO) to investors. SRG is looking to raise new capital of approximately £25 million to “refinance the acquisition of a surface mine site with reserves of approximately 0.6 million tonnes, to accelerate the acquisition of certain 3rd party rights to one of the Group’s properties, as well as to strengthen the Group’s balance sheet”, a move that will value the company at up to £250m.

There is no indication of the location of this surface mine site, and judging by the size, it is not one currently going through the planning process. It could, however, be linked to SRG’s application to build on Happendon Wood and Poniel in the Douglas Valley. This application for a hotel, office space and retail units appears to be an excuse to open cast Happendon Wood and land adjacent to Poniel, for which a planning application is expected. Could this be the finance behind two more open casts in the Douglas Valley?

The press release states that London-based Panmure Gordon Limited is acting as sponsor and bookrunner for the placing and that the pricing of the placing and admission are expected to take place later this month.

The company also reported that over the last year to 27 March 2010 production at its sites grew by 12% to 3.4 million tonnes and revenues grew by 59% to £229.9 million. In trying to boost its portfolio for potential investors, it also offered these statistics highlighting the companies growth opportunities:

• Organic growth potential in coal production underpinned by reserves and resources base and planning consent track record
• 52.3 million tonnes of audited reserves and resources, 7.6 million tonnes of reported resources and, in addition, prospective resources of over 40 million tonnes of coal
• Exposure to upside in world price of coal; world coal consumption forecast to increase by 56% over the period from 2007 to 2035 driven by industrialisation of India & China
• 31% of UK coal consumption from indigenous production in 2009; UK demand expected to continue to exceed indigenous production
• Significant opportunities from land portfolio: current planning proposals and consents include approximately 2,100 new homes and 3 million sq ft of industrial and distribution space
• Growing and established market for renewable energy projects in Scotland with a favourable planning environment: Group working on developing 7 wind farm sites

It is clear that Scottish Coal is taking advantage of current increased coal prices and favorable government policy (First Minister of Scotland Alex Salmond said: “It is particularly welcome that SRG is looking to capitalise on the huge growth opportunities in Scotland’s renewable energy market and is poised to make its own contribution to our nation’s world-leading climate change targets.” – strange given that this is the UK’s largest open cast coal mining company he’s talking about) to increase its production and profits at the expense of communities and the environment.

A sliver lining to the ominous dark clouds of coal dust? Scottish Coal’s annual report from March this year lists “the actions of anti-coal protesters on site” as an operational risk to its mine sites. Some people must be doing something right.


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