Restoration of Ffos y Fran mine will look 'quite different' to what was planned

Ffos y Fran opencast mine
Ffos y Fran opencast mine -Credit:Mark Lewis

The plans to restore the Ffos y Fran mine will look "quite different" to the original plans due to a shortfall of millions of pounds, a council official has admitted. Restoring Ffos y Fran mine in Merthyr Tydfil will cost between £75m and £125m, a council planning officer has said, while admitting: "We have only got £15m".

Representatives of Merthyr Tydfil council appeared at the Senedd's climate change committee on May 22 after initially declining to give evidence. During the meeting David Cross, principal planning officer at the council, told the committee the cost of restoration has been estimated at between £75m and £125m.

“The reality of the situation is that we have only got £15m,” he said, cautioning that restoration plans will be “quite different to what we originally agreed”.

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Merthyr (South Wales) Ltd (MSW) has not taken up the invite to attend. Committee chairman Llŷr Gruffydd raised concerns about MSW earmarking £15m for site restoration while company accounts reference there being nearly £75m. “What’s this £74.5m sitting in a bank account doing then if they don’t believe it's for that purpose?” Mr Cross replied: “Whether that money’s there or not, that’s for MSW.”

Geraint Morgan, a council solicitor, said initial planning permission was granted by the then-Assembly in 2005 with a requirement for a £15m bond and a £15m guarantee. Mr Morgan explained that when Miller Argent sold the site in 2015 MSW agreed to pay £625,000 a quarter into an escrow account.

Pressed on where the £15m guarantee has gone Mr Morgan said: “I can’t actually answer that. A parent company guarantee is only worth what a company is worth.” He said latest accounts show about £104,000 in Merthyr Holdings Ltd, the parent company.

“That’s more grim than I thought,” said Janet Finch-Saunders, the Tory MS for Aberconwy. She described the £15m as money “which seems to be somewhere in the ether”.

Stressing that restoration is a matter for the developer Mr Morgan told the committee it was always understood that £15m would not necessarily be sufficient to restore the site. He said the company failed to make payments and the council had to take High Court action but the developer has now met the £15m escrow requirement.

Mr Cross told the committee an annual assessment of liability is not in place despite 2016 Coal Authority best practice guidelines because permission was granted long before. He warned: “If you go through enforcement and you may be even successful – if there’s no funds in the pot to actually deliver the restoration it becomes a difficult challenge.”

The council's chief executive, Ellis Cooper, described the relationship with the developer as challenging, saying a revised restoration scheme is set to be brought forward by November. Asked about concerns the operator could abandon the site or declare insolvency Mr Morgan said the site could ultimately be owned by the Welsh Government or Crown Estate.

He told the meeting the council is renegotiating terms for use of the escrow money to allow some restoration in accordance with a 2007 approved strategy. He said the deal will be drafted so the money is released after work has been carried out.

Geraint Thomas, leader of the independent-controlled council, said the fly in the ointment of restoration plans was the British coal industry being privatised in 1994. Cllr Thomas said the council has been left in a mess without the required funds for restoration.

Asked about a strained relationship with residents, the Cyfarthfa ward councillor claimed: “If you ask the majority of people in Merthyr Tydfil they’d be quite happy.” He said the financial benefits of the site have been imperative to keeping many sports clubs and community organisations running over the past 10 to 12 years. Pressed on who is ultimately responsible for what has happened at Ffos y Fran, Mr Cross pointed the finger firmly at the developer.