FUEL logistics supplier Hargreaves Services is to mothball the Maltby mine in Yorkshire, it said yesterday.
In August Hargreaves warned that Maltby, which supplies Drax Group’s power station in North Yorkshire – Europe’s largest coal-fired plant – was at risk of being mothballed because of worsening geological problems.
A report subsequently commissioned by Hargreaves said that one of the mine’s coal panels, which was leaking gas, oil and water, was not viable on health and safety, geological and financial grounds, causing the AIM-listed firm to close the mine.
The closure of the Maltby Colliery will mean around 500 staff will be at risk of redundancy.
Hargreaves earlier this year issued a profit warning triggered by problems at Maltby, which produces more than 1m tonnes of coal each year. The company said that delays in mining a new coal seam would reduce profit by £12m to £16m for the year ending May 2013.
Hargreaves said alternative proposals for Maltby should be tabled before the end of month, to be considered by the board.
In September, Hargreaves posted record profit of £43.1m for the year to 31 May, up 16.8 per cent year on year. Revenue over the year rose 24.6 per cent to £688.3m.