Mining problems trigger Hargreaves profits warning

HARGREAVES Services has warned next year’s profits could take a hit of up to £16m after problems at Maltby Colliery.

The company told investors this morning that attempts to develop a new coal face had been hampered by “unusual geological conditions”.

work on the new face had to be suspended earlier this month amid safety concerns as water, oil and gas found their way into the area being mined.

Chief executive Gordon Banham said: “Whilst we are bitterly disappointed by this development, health and safety concerns far outweigh those of operational or financial performance.

“I am confident that this was the right decision and also that there was nothing that could have been done by the mining team to foresee or avoid this situation. With the support and help of the staff and unions, the face gap should not reflect on the longer term viability or profitability of the mine and we will work hard to mitigate the resulting impacts.

“The Group has the depth, breadth and financial strength to work through this and we do not see this event having any material adverse impact on the medium or long term prospects for the Group.”

Hargreaves Services believes the problems will lead to a gap of up to 16 weeks between completing production from the current face and starting on the new one.

Gerry Huitson, production division director for Hargreaves Services, said: “This is a very unusual situation and to our knowledge this has never happened before in Maltby’s long 100 year history.

“No one on the mining team, including our independent expert geologist with 32 years experience at many different UK mines, has come across these conditions before. We will revise the mining plans to avoid this locality and it is highly unlikely that these conditions will be found again in any subsequent panels.”