Pit closure could bring in £14 million

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Solid fuel and bulk materials group Hargreaves has reported half year pre-tax losses totalling £9.1 million ahead of the mothballing of Maltby Colliery.

Hargreaves closed the 100-year-old Rotherham pit in December with the loss of 540 jobs after failing to find a way to control water, oil and gas leaking into excavations designed to open up new reserves.

Problems at Maltby cost Hargreaves £9.8 million prior to the closure.

The company lost a further £17.7 million as a result of a fraud, which it says was orchestrated by a managing director at its Belgian joint venture, although the final cost could be reduced by Hargreaves’ attempts to recover some of the money.

Hargreaves’ chairman, Tim Ross, said: “This has been a challenging period for the group. Although Maltby and Belgium have had a significant impact on reported results, the underlying performance of the business in the first half was good and the prospects for the second half are also encouraging.”

Hargreaves also manages Hatfield Colliery, on behalf of bank group ING.

The group says last month’s landslip, which forced the closure of the Doncaster to Goole railway line, has disrupted coal movements and it has had to start moving coal to Hatfield’s customers by road.

Hargreaves says the mothballing of Maltby Colliery is progressing well.

Equipment down the pit should be recovered by the end of March, discussions about selling it are progressing well and it expects to raise £14 million through sales, so the overall effect of mothballing the colliery will be positive.