SHARES in Scottish coal mine operator ATH Resources halved in value yesterday after the firm warned that falling international coal prices had forced it to put pit expansion on hold.
Coal prices have slumped by 21 per cent since January and 28 per cent since the start of the firm’s financial year in October.
ATH said it expected the trend to continue and warned: “New sites will continue to be developed through the planning process, however, the opening of some sites may be delayed and capital expenditure kept to a minimum whilst coal prices remain subdued.”
The miner also revealed that it will have to pay £1.1 million this year and the same sum again next year to buy “carbon credits” to take part in the UK government’s Carbon Reduction Commitment Scheme.
ATH has lodged an application for a judicial review to try and escape from its inclusion in the scheme and is taking legal advice over whether it can get an exemption from a court to stop it from paying the £2.2m to buy carbon credits.
Matthew McDonald, an analyst at house broker Seymour Pierce, noted: “Though the amount could be reclaimable, should its appeal for a judicial review be successful, the group has outlined that its trading statement expected in late June is likely to be adversely impacted.”
Last month ATH – which is based in Doncaster but operates all four of its pits in Scotland – put the brakes on plans to expand its mine at Glenmuckloch, in Ayrshire. The stock closed down 4.5p or 47.4 per cent at 5p having lost 90 per cent of its value in the past 12 months.
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Tuesday 21 May 2013
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