Hargreaves Services snaps up parts of Scottish Coal

5th Jul 2013 15:39

Durham-based coal firm Hargreaves Services has bought parts of collapsed coal-mining producer Scottish Coal for 8.4m pounds.The deal covers 30,000 acres of land and includes Scottish Coal's rights and interest in various wind farm projects that were in the design and planning stage. Five Scottish Coal mining sites including Broken Cross and House of Water are also part of the complicated transaction. These mines have been put into separate new companies which will continue to be owned by Scottish Coal. The care and maintenance of the sites will be outsourced to Hargreaves.Coal-mining is expected to restart at the sites and Hargreaves is targeting 1.0m tonnes of production in the current financial year. It expects to invest up to £15m in new plant and equipment to make the sites operational again. Hargreaves has exclusive options to buy the new companies for a nominal sum. It believes that there are 3.0m tonnes of coal reserves at these sites and about 12m tonnes of reserves at other pipeline sites. Jefferies analyst Justin Jordan, who has a 'buy' rating on the shares, predicted the deal would lead to mid-single percentage upgrades to 2014 earnings forecasts.Shares in Hargreaves Services were up 0.37% at 819.5p at 15.42 on Friday. TB