Mining company: Merthyr (South Wales) Ltd (MSW) is the current operator of the sprawling opencast coal mine, Ffos-y-fran, in Merthyr Tydfil, South Wales.

Claim: MSW claims "It was established that there are insufficient funds available to achieve the 2015 restoration strategy and therefore an alternative scheme is required." (EIA Scoping Report, July 2024). It is on this basis that a new application will be considered by Merthyr Tydfil County Borough Council.

MSW's 'solution': To downgrade the restoration scheme promised to surrounding communities to one that amounts to doing as little as possible. Even returning the tens of millions of cubic metres of coal tips to fill in the gaping void the company created and allowed to flood is considered "not feasible or economic" (EIA Scoping Report, July 2024)

Why MSW is offering to do any works: Merthyr Tydfil County Borough Council holds £15 million in an Escrow account that it forced MSW to pay into (by court order). This was never intended to fund the original restoration agreement costed at £75-120 million, but that is what's happening now as MSW is claiming the company doesn't have the finances to pay for the restoration it previously agreed to fund. MSW wants this £15 million so is proposing a massively downgraded restoration plan and presenting this as the only option so the Council will pay this out to them. The Council is afraid the company will walk away if it is compelled to honour its contractual agreement to fund the restoration itself. If that happens, the Council would have to pay a new company to come in to restore the site, which'd cost more.

Our recommendation: Merthyr Tydfil County Borough Council has refused to pursue MSW to deliver on the contractually agreed level of restoration, and is poised to consider a downgraded plan by MSW which would affect surrounding communities living in Merthyr Tydfil for generations. Haven't they put up with enough after 16 years of coal mining, dust, and noise pollution? The Welsh Government urgently needs to launch an inquiry MSW finances and the Council's actions, issuing a 'holding directive' to prevent the Council approving the downgraded plan in the meantime.

To our knowledge, there has been no evidence submitted by MSW that it cannot fund the full restoration it is contracted to undertake. On the contrary, MSW's most recent, publicly available, financial statement on Companies House says "Full account has been taken for funding the restoration obligation in the future costs and cash flows", making £90,948,885 available by 31 Dec 2022, admitting record profits that year, with its ultimate parent company, Gwent Holdings Ltd, reporting "The average coal price achieved increased by 94% to £151.66 per tonne". This was based on Ffos-y-fran closing at the end of its planning permission in September 2022 - but it continued illegally mining coal for over a year after that, and even outside its licenced area, selling an extra 640,000 tonnes of coal - driving profits even further.

It's been claiming tax discounts to HMRC each year by phasing expected restoration costs that it now refuses to pay. This report goes on to say "The total costs of reinstatement of soil excavation and of surface restoration are recognised as a provision at site commissioning when the obligation arises. The amount provided represents the present value of the expected costs.".

This very much sounds like the company able and prepared to pay the restoration costs, and had already claimed tax discounts for it. So why is the company being allowed to duck tens of millions in what it owes?

As is typical of the mining industry, operations and financing is done through a complicated constellation of interconnected companies owned by family members (depictions of which are illustrative only and not based on any likeness). This kind of practice could help evade liabilities - though we're not suggesting that was the intention here. The following information is accurate to the best of our knowledge, please refer to Companies House for confirmation/further details:

• Merthyr (South Wales) Ltd
  • Company number 04261274
  • David Stanley Lewis - Director and shareholder
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Named operator of Ffos-y-fran

• MERTHYR (NOMINEE NO.1) LIMITED
  • Company number 04261269
  • David Stanley Lewis - Director as of August 2024
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Dormant company subsidiary of Merthyr (South Wales) Ltd

• Ffos-y-fran (commoners) Limited
  • Company number 04892620
  • Jayne Helen Lewis – Director
  • Andrew John Lewis - Ex-Director
  • Dormant company subsidiary of Merthyr (South Wales) Ltd

• Merthyr (Ffos-y-fran) Limited
  • Company number 06353565
  • David Stanley Lewis – Director
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Dormant company subsidiary of Merthyr Holdings Limited

• Merthyr Holdings Limited
  • Company number 06330412
  • David Stanley Lewis – Director
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Subsidiary of Gwent Investments Limited
  • Holding company

• Gwent Investments Limited
  • Company number 08936878
  • David Stanley Lewis - Director
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Investment company

• Gwent Holdings Limited
  • Company number 10119615
  • Jayne Helen Lewis and Andrew John Lewis – Directors
  • Ultimate parent company of Merthyr (South Wales) Ltd