THERE are claims that the mining company behind Ffos y Fran does have the money for a more than £90m restoration of the site.
The campaign group Coal Action Network says findings from a forensic accountancy firm it has instructed show that the mining company at Ffos y Fran, Merthyr South Wales Ltd does have the finances for the originally agreed restoration.
It says that the company has claimed since 2023 that it doesn’t have the finances to fund the £91.2m restoration of the 400 hectare site that it signed a contract to deliver in 2015.
Coal Action Network claims the company is currently using this threat to pressure the local council to agree to a massively reduced restoration that would leave behind a churned up landscape with three colossal coal tips, a huge polluted flooded void, and a 100m exposed sheer cliff edge.
Coal Action Netowrk has instructed C.Lewis & Company, an international forensic accountancy firm, to verify the mining company’s claim regarding not having the finances to deliver the agreed restoration.
A document on C.Lewis & Company’s findings shows that as at December 31, 2023, the company director had attested by signing the financial statements of Merthyr South Wales Limited (MSWL) that his best estimate of the costs required to restore the site at Ffos y Fran was £91.2m.
It also shows that the full amount of the restoration costs has been loaned by MSWL to Gwent Holdings Limited, another group company.
Another finding in the document states was that as at December 31, 2023, Gwent Holdings Limited still held cash in excess of this amount, and so, if it were to repay MSWL what it owes, MSWL would be able to fully fund the £91.2m restoration costs.
And finally, it states that “even if Gwent Holdings Limited were to distribute all of its available profits (which it has not done based on the information available at time of writing), it would be left with cash of around £67m which it could likely not distribute lawfully without wrongfully trading.
“Together with the £15m held in escrow this would fund substantially all of the £91m required for the full restoration scheme, and even if it did not have the full amount in cash, the company would have assets that would in principle be available to fund the liability to MSWL. “
Coal Action Network says that the result is that the company can, and is legally obligated to, fund the restoration of the site with the easiest way for it to evade paying being to persuade the council to agree to devalue the restoration plan.
It adds that if the company succeeds, the UK will send a message that “polluters don’t pay” just as oil and gas fields start to close in the North Sea.
Daniel Therkelsen, communications manager at Coal Action Network, says “With forensic accountants concluding that Merthyr (South Wales) Ltd can fund the full agreed restoration, the council has no choice but to refuse the mining company’s attempt to get off the hook.
“Anything less than an outright refusal would make the planning councillors responsible for the three colossal coal tips, flooded void, and sheer cliff edge that would otherwise be left behind – and the young lives this would put at serious risk.
“No amount of greenwash can justify the council allowing the company’s director to run off with up to £91 million that is currently tied to cleaning up the mess this mining created.
“If planning councillors were to allow that, it would be a dereliction of their duty.”
But Merthyr South Wales Ltd responded by saying: “The company notes the continued and increasingly aggressive attempts by Coal Action Network to undermine the proper operation of the planning system by exerting undue pressure on the local authority.
“These attempts rely on threats, insinuations, and a calculated campaign of trial by media, founded on unfounded, misleading, and demonstrably inaccurate claims.
“Such tactics appear designed to bypass the statutory planning process and to distort public and regulatory understanding of the facts.
“Rather than engaging with the application on its planning merits, Coal Action Network has sought to influence the outcome through media-led campaigning and selective narratives.
“The company has full confidence in the robustness and integrity of the planning system and in the local authority’s ability to determine the current planning application strictly in accordance with the relevant legislation and planning policy, and solely on the merits of the application itself, without regard to external pressure or media-driven campaigns.”
It also said that the numbers quoted are considerably historic, that those numbers and the conclusions purported to be drawn bear little relevance to the current reality and that both are wholly irrelevant under planning legislation to the application for consideration by the local authority.
Merthyr Tydfil Council said: “From a planning perspective, the council’s position has not changed. We continue to assess the planning application for the restoration of the Ffos y Fran site in accordance with planning legislation, relevant policy, and the public interest.
“The council is aware of a range of statements being made by external organisations. Financial assertions or disputes between third parties are not matters for the local planning authority to determine outside the statutory planning process. Any decision will be based on relevant planning considerations, supported by appropriate professional advice and evidence.
“The council categorically refutes any suggestion that elected members are acting improperly or without integrity. Planning councillors are bound by strict legal and ethical requirements and must determine applications impartially and lawfully. Personal allegations or insinuations about councillors’ motives are wholly unfounded and inappropriate.”
