Third director quits SRG after float aborted

Scottish Resources Group, the country's biggest open cast coal miner, has lost another key director since abandoning plans to raise £25 million on the stock market this summer.

• SRG's St Ninians open cast mine near Dunfermline

Sen Mahon, the group's non-executive chairman, has left the group, sparking fears it may fail to achieve its ambitious growth plans.

The loss of Mahon follows the resignation of another two directors, Nick Guest, the firm's finance director, and Alan Somerville, managing director of estates and renewables, in October.

All were considered key members of the team to lead the flotation alongside chief executive Don Nicolson, although at the time the firm insisted it would still press ahead with the move some time in the future.

In a statement, SRG said Mahon, a 64-year-old former accountant who had been hired in 2008 specifically to transform the firm from a private to a public one, had chosen to retire.

The firm - owner of Scottish Coal and SRG Renewables - announced the appointment of Ian McPherson, 70, in his place. He is a former main board director of building products firm Tarmac.

McPherson led Tarmac's flotation of its industrial products division, Ruberoid, in 1993. He takes up his role at SRG on 1 January.

Nicolson said: "On behalf of SRG, I would like to thank Sen for his valued contribution since becoming chairman in 2008.

"He has led the board through a very important time in the company's development and leaves the business well positioned for the future.

"I would also like to welcome Ian to the role of chairman.

"SRG looks forward to benefiting from his extensive business experience, including as a main board director of Tarmac responsible for its USA operations, the IPO of Tarmac Industrial Products Division on the LSE and non-executive directorships of several public quoted companies."

In July, Alloa-based SRG pulled its planned flotation at the last minute citing challenging markets. The firm had aimed to achieve a valuation of 220m. However, one of its investors, a firm called Palmaris, recently said SRG would be worth closer to 96m if it went to the market now.

Recently, the miner acquired a controversial open cast site in Fife, Blair House, from English rival UK Coal for 1.5m. In March, before SRG bought the mine, the site was occupied by about 30 environmental activists in a bid to halt tree-felling work.

SRG's main shareholder is investor group Parkburn, led by Colin Cornes. He took a controlling stake in what was then called Mining (Scotland) for a "nominal" sum in 2000.

In the year to 27 March, SRG revealed it had made a pre-tax profit of 28.5m compared to a 12.3m loss the year before.

SRG operates nine open-cast coal mines in Scotland and accounts for about one-fifth of total UK coal production, supplying Longannet power station. The group has more than 1,000 employees.

First Minister Alex Salmond had previously supported the flotation, praising the group for being a significant employer. He added that it was "particularly welcome that SRG is looking to capitalise on the huge growth opportunities in Scotland's renewable energy market and is poised to make its own contribution to our nation's world-leading climate change targets".