Coal group Hargreaves Services is to restart operations at five opencast mines closed after the collapse of Scottish Coal, following the acquisition of assets from the liquidators for £8.4m.
The Durham-headquartered mining services business was named as preferred bidder last May for certain assets of Scottish Coal and its related companies.
After due diligence, Hargreaves will acquire the assets in three phases, the first including a property portfolio of about 30,000 acres which takes in Scottish Coal’s rights and interests in various wind farm projects that were being progressed through design and planning.
Scottish Coal will share in any near-term profits realised on the wind farms.
Hargreaves intends to progress the wind farm projects, together with one specific development property, as a joint venture with the independent Scottish Mines Restoration Trust, providing a future potential income stream to the trust.
However, the group does not currently intend to take these projects beyond the realisation of the design and planning stages. The second phase of the transaction involves the transfer of Scottish Coal’s interests in five former active mining sites, including Broken Cross and House of Water, which have been hived down into separate new companies (hivecos) which will continue to be owned by Scottish Coal.
On establishment of each of the hivecos, the care and maintenance of the site will be outsourced to Hargreaves and as and when sites become operational, Hargreaves will acquire the necessary plant and equipment.
When outstanding restoration work on each site is resolved on commercially acceptable terms, Hargreaves will, in the third phase of the transaction. acquire the relevant hiveco from Scottish Coal and fully integrate it into the group.
To support the target of one million tonnes of production, Hargreaves said it would expect to invest between £12m and £15m of capital.
Hargreaves chief executive Gordon Banham said: “This transaction represents a further significant step in our strategy to acquire key surface mining assets, which we believe will enhance shareholder value.”