County Durham energy services group Hargreaves has paid £5m to save more than 200 Scottish coal jobs by buying the debt of miner Aardvark, which is being wound up.
Aardvark is owned by Doncaster-based ATH Resources and has all its open-cast mines in Scotland. ATH fell into administration in December.
Esh Winning based Hargreaves, which bought ATH’s debt – which has a face value of £12.5m - from private equity firm Better Capital, said it would also seek to buy Aardvark’s operational sites at Duncanziemere and Netherton in Ayrshire.
Hargreaves chief executive Gordon Banham, said the acquisition of land and assets from Aardvark will boost its reserves. It estimates that the proven coal reserves at sites with planning permissions are more than 3 million tonnes, with a further 2 million at sites that are in the planning process.
It plans to restructure the Aardvark business to create an investment platform that allows viable sites to continue to operate and to safeguard employment. It also plans to help to address outstanding historic restoration obligations independent of ongoing operations. Hargreaves said any profit made on the acquisition of the debt will be used to support the historic restoration.
Banham said: “This transaction brings to an end a long and complex restructuring process. Whilst it has been a lengthy and difficult exercise, we are very pleased with the end result.
“In comparison with an unstructured liquidation, we have saved or created over 230 jobs and been able to continue mining operations at two of the key sites.”
He added: “We are pleased to have been able to help and support the SMRT [Scottish Mines Restoration Trust] which we hope will carry out an effective role in mitigating the legacy of unfulfilled restoration obligations following the financial troubles of ATH and Scottish Resources Group.
“In relation to the sites that have been disclaimed we will continue to engage with stakeholders to help find the best solutions. We will use the staff and operations that we have acquired to continue to invest in developing a profitable and sustainable surface mining business in Scotland."
Hargreaves was last week confirmed as preferred bidder to acquire some of the coal-mining assets of the failed Scottish Resources Group.
Last month it was reported that Hargreaves had issued shares to raise more than £40m which it will use to expand its surface mining operations.
The group is the UK’s leading supplier of solid fuel and bulk material logistics.
It operates across three continents, it has 2,500 employees and has a fleet of more than 400 vehicles based at depots throughout the UK. It employs between 80 and 90 staff at its Esh Winning HQ.