UK Government: Government announces GBP16.5 million investment for nine UK coal mines
Sep 16, 2004 M2 PRESSWIRE
Newly-appointed Energy Minister, Mike O'Brien, today allocated GBP16.5 million of Government funding to the UK coal industry.
Mike O'Brien said:
"I am delighted to announce this funding allocation which further reinforces the Government's commitment to safeguard the important role that coal plays in this country's energy needs. Coal Investment Aid will help safeguard the social and economic stability of these local communities for as long as possible and also have positive knock on effects for the regional and national economy.
"Coal supplies around a third of the UK's electricity demand, half of which is generated from UK produced coal. It is therefore crucial that we continue to invest in our mines to ensure that the remaining reserves are fully exploited while they remain economically viable."
Today's funding announcement brings the total funding commitment to GBP57.5 million since the CIA scheme was launched on 16 June, 2003.
Notes to Editors:
1. Coal Investment Aid was launched on 16 June 2003 with a budget of up to GBP60 million to support eligible investment projects at qualifying mines. The money was to be awarded in three applications periods (closing in July 2003, May 2004 and May 2005) for payment by 31 March 2008.
2. This announcement relates to awards in the second application period, which closed on 1 June 2004. Offers have been made to the following mines
* Eckington Colliery Partnerships - Derbyshire
* Aberpergwm (Energybuild) - West Glamorgan
* Daw Mill, (UK Coal Plc) - West Midlands
* Harworth, (UK Coal Plc) - South Yorkshire
* Kellingley, (UK Coal Plc) - North Yorkshire
* Maltby, (UK Coal Plc) - South Yorkshire
* Rossington, (UK Coal Plc) - South Yorkshire
* Thoresby, (UK Coal Plc) - Nottinghamshire
* Welbeck, (UK Coal Plc) - Nottinghamshire
3. The first CIA application period closed on 31 July 2003. The fourteen applications received were for support for projects estimated to be worth GBP476 million, and they requested GBP131 million of CIA, more than twice as much as the GBP60 million which was available. Successful applications were received, and awards have been accepted, for the following mines:
* Welbeck and Thoresby (UK Coal plc) - Nottinghamshire;
* Daw Mill (UK Coal plc) - Warwickshire;
* Harworth, Kellingley, Maltby and Rossington (UK Coal plc), Hay Royds (J Flack & Son*), - Yorkshire
* Eckington (Eckington Colliery Partnerships) - Derbyshire;
* Ellington (UK Coal), Northumberland
* Aberpergwm (Energybuild) - West Glamorgan;
* Tower Colliery - Mid Glamorgan.
(* Did not apply in Period 2 owing to company in process of restructuring)
4. An offer of aid was also made in Period 1 to Coalpower Ltd for projects at Hatfield Colliery. The company went into administration in December 2003, but the period for acceptance of the offer was extended so that it would be available to a new owner of the mine with a viable and eligible project. No buyer came forward and the offer lapsed with the result that the GBP15 million was returned to the CIA funds budget for re-allocation to other applicants. A further application was received for projects at Hatfield in the latest application period but could not be considered for an award because it did not comply with CIA requirements and was therefore invalid.
5. Because Period 1 applications exceeded the available fund, these awards were based on forecast expenditure to March 2005. As a result, only 2 out of 13 successful applicants received the full amount applied for, or for which they were eligible. At GBP94.6 million, period 2 applications again significantly exceeded GBP19 million available, and most applicants have been offered awards to support forecast expenditure to March 2006.
6. CIA is offered under EU Regulation 1407/2002 and is designed to provide up to 30% of total costs of investment projects which will maintain access to reserves which would otherwise be sterilised, and will help to preserve or create jobs in the coal sector, especially in economically and socially disadvantaged areas. In accordance with EU and CIA rules, the money awarded will only become payable as projects proceed and at the rate of up to 30% of project expenditure. Any allocation which is not used by the project for which it was awarded, and any money from awards which are not taken up, will be returned to the CIA fund and will be available for re-allocation in the final application period, which is due to close on 31 May 2005.
7. Further information about Coal Investment Aid, including details of projects and awards and payments made to date, is available on the DTI website at http://www.dti.gov.uk/energy/coal/invest_aid/index.shtml
CONTACT: Public Enquiries Tel: +44 (0)20 7215 5000 Textphone: +44 (0)20 7215 6740 (for those with hearing impairment) WWW: http://www.dti.gov.uk
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