Market volatility hits Monckton

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Leading solid fuels supplier and bulk materials transport group Hargreaves Services says it expects to have filled in and capped mineshafts at Maltby Colliery in Rotherham before June.

Hargreaves announced the closure of Maltby, with the loss of more than 500 jobs, a year ago, after excavations designed to open up new reserves at the 100- year-old South Yorkshire pit hit problems when oil and gas began leaking in and attempts to find a solution failed.

Maltby produced more than a million tonnes of coal a year, with around 60 per cent of its output supplied under a long-term contract with Drax, Europe’s largest coal-fired power plant.

Much of the remaining production was sent to Hargreaves’ Monckton works near Barnsley, which produces 200,000 tonnes of coke for use in the production of glass, detergents and steel manufacturing.

Hargreaves has offered Hadfield Colliery a short term option to acquire equipment removed from Maltby and says, in a trading update ahead of the publication of its interim results, that it remains confident that full value will be obtained in due course.

The group says it is trading in line with management expectations and is well placed to deliver a good performance in the second half of the year.

However, its Monckton works remains exposed to volatility in the steel sector, where some customers are trying to minimise supply levels and commitments by seeking quarterly contracts.

Hargreaves says that although risks continue around coke markets, particularly for Monckton, it is pleased with its strong coal trading performance and progress in surface mining operations.