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Industry news: April 2009

New supply deal for UK Coal

Open cast coal mining, BGS©NERC

UK Coal plc has announced that it has finalised a deal to supply coal for five years to the Ferrybridge power station in West Yorkshire as part of a move to renegotiate the company's major supply contracts. UK Coal has agreed to supply 3.5 million tonnes of coal to the power station, owned by Scottish and Southern Energy plc, by increasing output from its Kellingley mine in West Yorkshire and Thorseby pit in Nottinghamshire. Scottish and Southern Energy will provide a loan to UK Coal to help fund the production increases. A spokesman for UK Coal said the new deals would stabilise the company's revenues after an "extraordinarily volatile" year for coal prices.


UK Coal looks to fund Harworth reopening

Harworth coal mine, BGS©NERC

UK Coal plc, which has previously expressed an interest in reopening Harworth colliery, is now trying to raise funds for the recommissioning and development of the mine.UK Coal has applied to the European Investment Bank for a loan of £200 million with the support of the government. Harworth was mothballed in 2006. However new supplies of coal are now needed due to the closure of Welbeck colliery, where production is due to finish within the next 12 months. It is hoped that employees could be transferred from Welbeck to Harworth when of the former closes.


Shortlist of sites for potential new nuclear power stations announced

UK nuclear power plant, BGS©NERC

The Department of Energy and Climate Change (DECC) has announced a list of eleven sites that could be potential hosts to new nuclear power stations in the UK. Members of the public now have a month to comment on the proposed sites before the nuclear planning consultation later this year.

DECC published the list after vetting all applications to ensure that they were credible, that the sites could be operational by 2025 and that the nominator had raised public awareness of their intention to nominate. The eleven sites are:

  • Hartlepool nominated by EDF Energy
  • Heysham nominated by EDF Energy
  • Dungeness nominated by EDF Energy
  • Sellafield nominated by NDA
  • Kirksanton nominated by RWE
  • Braystones nominated by RWE
  • Wylfa Peninsula nominated by NDA and RWE
  • Oldbury nominated by NDA and EON
  • Hinkley Point nominated by EDF Energy
  • Bradwell nominated by NDA
  • Sizewell nominated by EDF Energy

Ed Miliband, Secretary of State for the Department of Energy and Climate Change, said "This is another important step towards a new generation of nuclear power stations. Nuclear power is part of the low carbon future for Britain. It also has the potential to offer thousands of jobs to the UK and multi–million pound opportunities to British businesses".

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New budget aims to encourage development of challenging oil and gas fields

Oil rig, BGS©NERC

The UK oil and gas industries have welcomed measures in the new budget, announced by Chancellor Alistair Darling this month, which provide incentives to stimulate investment in small and challenging projects in oil and gas development on the UK continental shelf.The Government estimates that these incentives could potentially unlock about 2 billion barrels of the UK's remaining oil and gas reserves. Industry body, Oil and Gas, UK Chief executive, Malcolm Webb, commented "This budget is a step in the right direction. The Government has recognised that reducing the tax burden on UKCS (UK continental shelf) production will enhance the recovery of this nation's indigenous oil and gas reserves.This can only help to improve the outlook for the energy security of this country."

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Pay cut for quarry workers


Welsh Slate Ltd, the operator of four quarries in North Wales, the largest being Penrhyn quarry in Bethesda, has asked 245 staff to take a 10 per cent pay cut due to a drop in sales. Welsh Slate has requested the pay cut due to the fall in demand for slate roofing and the decline in the construction sector. A company spokesperson said "given the lower demand for roofing slates caused by the recession, the company needs to reduce its cost base. Employees have been notified and discussions with their representatives have started."

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Aggregates Levy frozen in new budget

Construction materials, BGS©NERC

The Chancellor, Alistair Darling, has announced as part of this year's budget that the Aggregates Levy will be frozen at the current rate of £2.00 per tonne for the 2010–2011 financial year and that no index–linked rise will take place. Industry bodies, the MPA (Mineral Products Association) and the BAA (British Aggregates Association), have welcomed the announcement. It is hoped that this will aid the struggling quarrying industry, although the MPA and BAA have voiced concerns that the freeze does not go far enough. The MPA has recently been campaigning for a freeze of the levy at the £1.95 level of the last financial year. Jerry McLaughlin, economics director for the MPA, commented “The 2010–11 levy freeze provides some relief, which will no doubt be welcome – but an immediate freeze would have been much more welcome.” The Treasury estimates the Aggregates Levy will bring in £100 million less during 2009–2010 than during 2008–2009.

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Quarry firm fined over pollution

Quarry firm Marshalls Mono plc has been fined after polluting over 2 kilometres of a local watercourse with effluent from its Sovereign Quarry in West Yorkshire. The Huddersfield–based construction firm pleaded guilty to breaking its discharge consent and was fined £3000 and ordered to pay £4098 in legal costs.The accident happened when waste water was pumped from Sovereign Quarry, which produces crushed rock aggregate and dimension stone, into a tributary of Shepley Dyke releasing 10 times the permitted discharge into the watercourse, according to the Environment Agency. Samples showed the level of suspended solids to be 485 milligrams per litre compared with the permitted level of 40 milligrams per litre.

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Quarry firm goes into administration

UK hard rock quarrying, BGS©NERC

Crushed rock aggregate and building stone producers Castle Granite, based near Penzance, Cornwall, has been placed into administration. Castle Granite operates the Castle–an–Dinas quarry and employs 12 people.The contraction of the construction industry has been blamed for the cash flow problems of the firm. However, the administrators, Begbies Traynor, commented that the underlying business remains strong and they are confident of finding a buyer and securing jobs at the quarry.

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