Operating and Financial Review
The Sharlston surface mine scheme in West Yorkshire involved extracting coal in shallow seams and recovering discarded mineral in the former colliery tip.
BUSINESS REVIEW
UK COAL is the largest producer of coal in the UK, and a significant supplier of energy to the UK’s electricity industry. In 2008 we mined and sold 7.9 million tonnes of coal, which represented approximately 15% of the total amount of coal
burned in the UK. Predominantly our customers are in the electricity supply industry (“ESI”) and our production therefore represented around 5% of the total energy used to supply the UK with electricity.
At the 2008 year end, the Group had 4 operational deep mines and 5 surface mines.
Jon Lloyd
Chief Executive
As a result of our heritage, we have a very large estate of around 45,000 acres (18,200 hectares) of land. This estate includes agricultural land which was originally acquired for its underlying
coal reserves, and the sites of former mines and associated workings. The estate is largely focused on the UK coal fields along the A1/M1 corridor through Nottinghamshire and Yorkshire, and in Northumberland, although it also includes some very significant sites elsewhere.
Given their location and former use, these sites are often very well connected to road, rail and electricity networks, and represent an excellent opportunity for development of both residential and employment buildings, helping to meet the
long-term needs of the UK.
As a result of our business and strategy, we make a significant contribution to the UK’s energy needs, to the local communities where our operations are based and to social and economic regeneration programmes.
Objectives
STRATEGY
Jon Lloyd (centre, back row) with members of a team developing reserves in the new Deep Soft area at Thoresby colliery, north Nottinghamshire.
The Group’s purpose is to create shareholder value by accessing and mining reserves of coal where there is a clear prospect of creating substantial value over time and by realising the considerable value of our land portfolio through identifying optimum development opportunities, securing planning permissions, developing the sites and actively managing our estate.
The Group aims to be recognised as the safe and most secure provider of energy and a leader in community regeneration partnerships in the UK.
Mining
Deep mining
- To continually improve safety in our operations
- To reduce risk and variability in operational performance
- To optimise operating cost per tonne of output
- To achieve over time an optimum balance of long-term sales contracts and access market prices for our coal
Surface mining
- To continually improve safety in our operations
- To increase surface mine production and to maintain a sustainable level of production over the longer term through planning applications and consents
- To maximise productivity and operating performance on our sites
- To maintain the high environmental standards of our mining schemes and maintain close working relationships with local communities
Harworth Estates
- To identify a long-term supply of development sites and to promote these sites through the planning process
- To participate in the development of these sites where this will optimise shareholder returns
- To manage actively and to develop rental investment properties and maximise returns from these through asset enhancement, rental growth and/or disposal
One of the recently occupied buildings on the Advanced Manufacturing Park which is attracting new tenants.