ATH positive about new coal sites

OPENCAST coal miner ATH Resources is upbeat about its future prospects despite a shortfall in production from one of its sites.

The Doncaster-based group received planning permission to extend the Grievehill opencast coal site in Scotland earlier this year which, together with Muir Dean, also in Scotland, is worth three million tonnes of coal.

However, a delay in the receipt of the planning consent for Grievehill has resulted in lower coal production compared to the same period last year.

Despite this, ATH said operations at Grievehill and Muir Dean were progressing to plan.

Deliveries of new mobile plant equipment has started which the group said would provide additional production capacity to recover the shortfall in the second half of its financial year from Grievehill and other sites.

In a trading update ahead of its interim results for the six months to March 30, ATH said trading was in line with market expectations for the full year.

However, ATH said sales volumes in the six month period reflected the reduced production from Grievehill and were expected to be around 800,000 tonnes.

But average prices are ahead of expectations it said, with the average selling price of coal increasing by more than 10% to more than £35 a tonne.

ATH said the price increase partly reflected “the buoyant international market for coal” as demand for it had increased across the world, particularly in the Far East.

Consequently, ATH believes it will take advantage of the positive market in the second half of the year with a number of new contracts.

The group said the development of ATH Regeneration, its land regeneration and coal tip washing business, was continuing and the business is waiting for planning consent for the Langton site in Nottinghamshire where operations are expected to commence later in the year.

ATH Regeneration was formed when ATH bought fellow Doncaster firm A Ogden & Sons in 2006.

The group said negotiations with clients for the washing of two additional sites were progressing and were expected to conclude in the near future.

ATH Regeneration is also pursuing a number of opportunities to deploy its intellectual property in Australia. Discussions are underway with two mining companies for ATH to build, own and operate washing plants at operational mines in Queensland, it said.

ATH said as well as the planning consents for the Grievehill extension and Muir Dean sites, which has seen the group's permitted reserves increase by 2.5m tonnes to more than six million tonnes, a further extension to the Skares mine of 0.6m tonnes has recently been added to the total reserve base which now stands at around 8.4m tonnes.

ATH saw pre-tax profits before interest up 27% to £10.3m on turnover up 30% to £70.5m in the year to September 30.

The company has consolidated its position as Britain's third biggest coal producer after UK Coal and Scottish Coal.

It is number two to Scottish in the opencast sector, with five operational mines.

ATH will announe its interim results on June 10.