In a personally signed letter to the Council, Merthyr Ltd’s Director, David Lewis, claims production was reduced due to lockdowns so not all the coal could be mined in the void that was expected to be by the deadline of the 06 September 2022, so a time extension should be awarded to “ensure the full reserve can be realised”.

There are two issues with the justification attempted in Lewis’s letter:

1. The table of coal production and sales rates included on p20 of the Planning Statement indicate a reduction of 15-17% in total production which would not warrant a 3-year extension. It is also not clear why Merthyr Ltd still operated a single-shift pattern with reduced production for the first half of 2022 when lockdowns were not in place.
2. As the letter itself states, the hole that reduced production from Ffos-y-fran left in the market in the past was filled by alternative sources. The hole is historical, to fill it with new coal mining, the coal would have to be put into a time-machine. Any new coal won’t be to plug old markets, but will supply new markets, continuing to lock industry in to more coal and more CO2. The letter’s attempted justification is based on a false premise.

Via repeated Freedom of Information Requests, Coal Action Network eventually succeeded in forcing the Council admit only £15 million had been deposited by Merthyr Ltd into the escrow account for restoration. In 2018, restoration was estimated to cost £62 million, meaning there is roughly a £47 million shortfall (depending on how much of the site has been restored alongside coal mining since 2018). This is shortfall is highlighted by Merthyr Ltd in its Planning Statement for the time extension: “As the Council is fully aware, there are insufficient funds within the Escrow and restoration fund to allow for the full and successful implementation of the current restoration strategy for the site.”

Merthyr Ltd’s solution is “that the additional time to finish extraction and restoration will enable a more sustainable and modernised restoration scheme”. Although Merthyr Ltd promised to fund and carry out a restoration strategy as a condition to it gaining planning permission, the company now uses its failure to fulfil this condition as a reason to let it mine more coal. And by “modernised”, Merthyr Ltd almost certainly mean cheaper restoration scheme.

Merthyr Ltd transferred most the of the land ownership to Geraint Morgan Legacy Limited of which David Lewis is the sole Director. If the Council attempts to recover the £47 million shortfall for restoration, and Merthyr Ltd cannot pay, responsibility may lie with the landowner, which appears from its Companies House records to only have £2 million in the bank. Merthyr Ltd may reap the profits from years of mining, and the Council could be face bankruptcy to pay the remaining shortfall for restoration.

Similar situations have been seen with other mining companies (most notoriously by Celtic Energy) holding Councils to ransom for permitting more coal mining by threatening to fold or transferring the liability to shell companies, knowing Councils can’t afford to fund the massive costs involved in restoring ex-coal mining sites.

Merthyr Ltd have known for years that planning permission at Ffos-y-fran would expire on 06 September 2022, yet attempts to leverage the fact that it has seemingly failed to support its workers to reskill or find alternative employment as a reason to extend the planning permission: “…it will ensure that current employees have a further 9 months to weather the cost of living crisis and look for alternative means of employment” (Planning Statement).

Incredulously, Merthyr Ltd even goes beyond this neglect towards its workers, to use its own lack of business strategy as it approached the known end of planning permission as a rationale for permitting the initial 9 month extension to allow “…the operators of the mine to look at other investment possibilities.”

Merthyr Ltd’s Planning Statement attempts the justification commonly used be coal mining companies in the UK: “The transport emissions for each tonne of UK coal delivered to Port Talbot are typically five times lower than coal imported from abroad” and therefore, less CO2 is emitted overall if coal is mined and used in the UK. This argument relies on the idea that more coal mining in the UK would displace the same amount of coal being mined in another country, and the coal mined in the UK would be used in the UK.

• This has been widely debunked, most prominently by LSE Economics Prof. Paul Ekins (OBE) in an interview, pointing out that coal mines abroad will find alternative markets for their coal, with the effect being an increase in the supply and use of coal globally and a net increase in CO2.
• Transport emissions actually relatively minor compared to the CO2 emitted when coal is burned, so if increasing easily available coal in the UK leads to more being used, that would dwarf reduced transport emissions.
• Most transport emissions are concentrated at points of extraction and end-use, which would be the same if it is mined on the other side of the world or nearby – so we would welcome disclosure of the methods behind calculations that transport emissions ‘typically 5 times lower’ for coal mined and consumed in the UK versus coal imported from abroad. It is also worth noting that most coal mines in the UK also export a proportion of their coal.

Coal operators are notorious for making lofty claims about the unrivalled quality of coal they would mine—this is to circumvent the presumption against new coal extraction in planning decisions, hoping to fit into the loophole made for exceptional need and economic value.

Merthyr Ltd has rebranded its thermal coal as “dry steam coal”, a term that doesn’t seem to be widely used by anyone except Merthyr Ltd and its trade customers. In reality, this is just thermal coal, and used to be primarily sold to RWE’s Aberthaw coal-fired power station. However, Aberthaw had to stop burning coal from Ffos-y-fran to generate electricity because the European Court of Justice ruled the toxic nitrogen oxides it emitted were too high.

With the loss of this customer, Merthyr Ltd invested £10 million in machinery to refine some of its lower grade coal to ‘metallurgical’ coal that could be used in steelworks in 2015.

Merthyr Ltd has clearly been studying other coal mine applications in the planning system, and likewise in its Planning Statement emphasises Port Talbot Steelworks’ reliance on coal, claiming its thermal coal is needed in the vaguely worded “steel manufacturing process”.

• Merthyr Ltd make no claims about what secure contracts it has with Port Talbot or Scunthorpe steelworks, nor what proportion of its coal sales this market accounts for.
• It’s likely that some of the thermal coal from Ffos-y-fran is just burned to generate heat at the steelworks needed at various stages – coal which could be replaced with less polluting fuels and is often used in a blend with those other fuels.
• TATASteel has announced that Port Talbot will be converted to electric Arc Furnaces with assistance from the Government, or face closure. In either scenario, this will largely nullify its demand for coal from Ffos-y-fran.

Like most coal operators, Merthyr Ltd (and former coal operators) like to change the rules along the way. The original coal operator agreed to all the conditions attached to the original planning permission in 2005, but in 2008, the coal operator wanted to rip up condition 37 requiring col to leave the site by freight train. The coal operator applied for a 'S73' change to use HGVs to transport 100,000 tonnes of coal each year by road, rather than rail. The company pragmatically reduced this to 50,000 tonnes but HGVs loaded with coal on the roads is dirty and dangerous, so the Council rejected the attempt to change this condition. The company didn’t accept this, and won the right to change this condition on appeal in May 2011 (APP/U6925/A/10/2129921)

Merthyr Ltd want to change the rules again with this 'S73' application for a time extension to mine more coal and delay the promised restoration. Each time the coal operators change the rules, it’s inevitably the local communities living in Merthyr Tydfil that pay the price. Enough is enough.

Based on the planning permission issued on 25 January 2012, coal mining was to cease by the end of 2016 and progressively restored, with completed restoration by the end of December 2017, followed by a 5-year aftercare period. However, as so often happens, this promised restoration has yet to even be started. Bryn Bach Coal Ltd submitted a Section 73 time-extension application to delay restoration works, which the Council permitted ahead of the coal operator submitted an application to extend mining. As a consequence, the local community has suffered an unrestored coal mine on their doorsteps for almost 5 years whilst the mining extension application is considered. To add insult to this injury, Bryn Bach Coal Ltd also write in their environmental impact assessment (EIA) that the extension applied for would “enable the full restoration of the existing and the proposed extension”, making the completion of the previously promised restoration now appear dependent on profits from the extension—not dissimilar from the narrative in Celtic Energy Ltd’s extension applications.

Bryn Bach Coal Ltd claim Glan Lash produces ‘premium quality anthracite’, without parallel in South Wales—a suspiciously similar claim is also made by EnergyBuild Ltd about their Aberpergwm deep coal mine in South Wales.

Despite admitting that 50% (which the company recently changed to 25% in 2022, without explanation or evidence) of the coal mined would be burned for domestic heating, and failing to account for what percentage is destined for other uses, Bryn Bach Coal Ltd haughtily claim in their EIA “that to refuse planning permission based on the impact our proposal will have on Climate Change and Carbon Emissions would be globally irresponsible.”

Bryn Bach Coal Ltd does not determine global coal market conditions and cannot predict demand of different industries. Ultimately, the company will sell to whoever wants the coal and is offering the highest price for it. There will be nothing in the planning permission that controls how the coal is consumed. Bryn Bach Coal Ltd's claims around this may well just be an attempt to make the mine seem more acceptable to Planning Councillors and the public - don't fall for it.

See our key facts and figures on the Glan Lash expansion proposal

Council commissioned the independent reviews of the technical reports paid for, and submitted by, Bryn Bach Coal Ltd on how the coal mine extension would impact water flows (hydrology) and the ecology reliant on that in the area. An independent Planning Ecology report in July 2022 recommends rejection of the application to fulfil the Council’s duty to “maintain and enhance biodiversity under Section 6 of the Environment (Wales) Act 2016, Section 6.4.21 of Planning Policy Wales or under Well-being Goal Two of the Well-being and Future Generations Act 2015 (AResilient Wales)”, and points out “documentation provided by the applicant is misleading in places as it makes frequent reference to the restoration of habitats”. In a letter to the Council, Friends of the Earth Cymru precede this independent Ecology Planning report’s conclusions by pointing out that “While mitigation is proposed in the form of restoration and replanting, these trees and associated landscape proposals will take years to grow back to current levels, and existing habitats may not recover”.

The 2018 EIA report paid for by the coal operator, Bryn Bach Coal Ltd, identifies that ancient woodland extends 2.52 hectares inside the site boundary, which would be at risk if the extension goes ahead, but claim the woodland should not be categorised as ancient woodland. The ecologists refute the 2011 classification by Countryside Council for Wales and Forestry Commission Wales, by citing a more obscure historic 1988 source that does not list it as ‘ancient woodland’. In a more recent EIA report by Pryce Ecologists, they stopped using the downgraded term ‘historic woodland’ and stuck to the correct ‘ancient woodland’ classification. This is reinforced by the July 2022 independent Planning Ecology report citing the woodland to be “circa 120 years old” and “cannot be compensated for by the creation of new woodland within a 17-year timeframe”. This is in direct contraction to what was claimed by the Pryce Ecologists EIA report paid for by Bryn Bach Coal Ltd. The independent report goes on to say it would take 120 years for the newly planted woodland to support the same biodiversity, by which time the existing woodland would be 240 years old if it wasn’t removed, and therefore probably still ahead in biodiversity. The independent report is also critical of the 2018 EIA report as ‘The applicant has incorrectly assessed that none of the hedgerows on the site are “important”’, arguing the loss of these hedgerows should be a ‘material consideration when considering this planning application’, particularly as the restoration plan’s “amount of new hedgerow planting is well below the 2:1 ratio associated with habitat compensation and habitat loss” and “40-50% of this planting is in positions where it will contribute little to biodiversity”.

The independent hydrology review commissioned by Council is highly critical of the reports provided by Bryn Bach Coal Ltd, with specific criticisms like “it is my very strong opinion that the information provided is insufficient”, “here appears to have been a complete absence of research on the hydrological management of abandoned mine workings in the area”, and “unsafe assumption[s]”, “I disagree entirely with this statement, and find it hard to understand how the reported data collection exercise could have informed the understanding of whether the marshy grassland is groundwater-dependent to any degree”. Lambasting one of the most recent hydrology reports by Humphries and Leverton in 2022 (again commissioned by Bryn Bach Coal Ltd), the independent review claims “it is based on a wholly inadequate ecohydrological conceptual model, the central limitation being an extremely poor understanding of the hydrogeology of the area … I am strongly of the opinion that the information provided is not sufficient to enable the Local Authority to determine whether or not the proposals will cause significant ecohydrological impacts”. In relation to the restoration plan, the review highlights that the “current claim that sequential backfilling of mined areas will completely restore the original hydrology as the workings move from west to east is, in my opinion, unsafe.”

Consultation question: Considering the information presented in this call for evidence paper, and your own knowledge and experience, what are your views on the extraction of coal in Scotland?

Our response: The Welsh Government's most recent policy statement on coal should provide a starting point for the Scottish Government to build upon (https://gov.wales/coal-policy-statement-html) in developing its own policy, as there are clear and relevant parallels between both Governments.

Both Wales and Scotland has a long legacy of suffering the localised impacts of environmental blight and hazardous conditions of coal mining, with nearby communities rarely seeing a significant share of the economic benefits. Wales is still littered with unrestored or poorly restored coal mines. It was reported that only this year are the final abandoned coal mines in Scotland being restored - again, often to revised, lower standards that what was promised nearby communities due to insufficient restoration bonds.

Now more is known about climate change, both Wales and Scotland have led the way in developing progressive policies and practice to realise their ambitious targets. This cannot include viably include coal, which is worse in CO2 emissions than natural gas and oil in its conversion factor to energy. The EIA Pathways to Net-Zero report make this very clear, underscoring that no new coal mining for any purpose can be part of a pathway to Net-Zero by 2050.

A critical part of that report is no new coal mining for any purpose. The report goes further to explicitly include coking coal for steel in this prohibition. Port Talbot Steelworks in South Wales and British Steel in England are the 2nd and 3rd largest single-site sources of CO2 in the UK - because they burn coal. Any policy that differentiates between the extraction of coal for energy production and coal for steel production, ignores this growing threat to meeting climate targets across the world. It would also ignore the rapidly escalating developments around the world in decarbonising the steel industry. Green steel is on its way, with the first delivery of commercial quantities made from Sweden in 2021. Unfortunately, once investors have opened a coal mine, they will seek return on that investment and find alternative markets for the coal, or laggard steelworks that still rely on coal in the future. So permitting new coal mining for steel will prop up the biggest polluters and discourage transition to new technology and practices.

There is no viable future for any of us that relies on coal to get us there. Scotland should be using its just transition fund to skill its inhabitants in the industries of the future, not ploughing people into the industries that destroy that future.

• Coal to be extracted: 47.3 million tonnes (13.6 million tonnes of which would be non-target coal extracted in the process and put back underground after), at a rate of 1.9 million tonnes per annum, including non-target coal.
• Coal to be sold: NAE Ltd estimate a total of 33.7 million tonnes of coal will be extracted and sold - 1.4 million tonnes of coking coal per annum
• CO2: 100 million tonnes (total)
• Methane: 750 thousand tonnes (total - GEM)
• Intended market: UK and Europe.
• Type of target coal: High-volatile coking coal.
• Current land use: Primarily dairy cow farming.
• Envisaged deep mining method: Originally longwall mining, but Bord and Pillar underground mining is now under consideration.
• Area: 185 km2 covered by 3 conditional licences (Lochinvar North, Central, and South)
• Anticipated cost: £18 million to secure a full licence for the proposed coal mine over 4 years.
• Coal quantity: Borehole analysis estimate 49 million tonnes, with a further 62 million tonnes inferred. In total: 111 million tonnes of coal.
• Time span: 26 years.
• Coal transport: By rail via the West Coast Main Line for direct delivery to either UK steel mills, or to the port of Hunterston or port of Blyth for shipping into Europe.
• Relevant Councils: Dumfries and Galloway Council, and Cumbria County Council.

(Company-supplied in the application for a conditional licence to The Coal Authority in 2020. Redacted by The Coal Authority)

Eyes and ears on the ground: ‘Lochinvar Coal Limited’ employs someone in the role of ‘community-liaison’ based in the town of Canonbie.

Dirty coal: NAE Ltd’s target sulphur content is 1.2-1.4% whereas current imports from USA are less than 1.2%, with some as low as 0.9%. The higher sulphur content of coking coal from the proposed coal mine in West Cumbria recently led an industry leader to rule out its use in UK and European steelworks.

Rolling the dice: based on a Wood Mackenzie forecast of European demand for imported coking coal to grow over 50% from 2017 to 2035. Recently, serious flaws in Wood Mackenzie forecasts were revealed in a public inquiry into the proposed Whitehaven coal mine—as it fails to properly consider rapidly increasing momentum behind green steel.

Best corporate quote: “Investor confidence is then expected to slowly return, making it possible to again raise larger amounts of funding required to progress quality coking coal projects, notwithstanding growing climate change related general anti-coal sentiment globally.” (Licence application to the Coal Authority, 2020)

Shaking the money tin: NAE Ltd claims it is currently progressing discussions for direct investment from potential investors, but its existing relationships have been redacted from the licence application.

2012: New Age Exploration Limited (NAE Ltd) acquired the Lochinvar licence. NAE Ltd set up Lochinvar Coal Limited (formerly Canonbie Coal Limited) in 2012 to operate the Lochinvar Coking Coal Project. However, NAE Ltd remains its parent company, and holds the exploration and conditional licences directly.

2013: NAE Ltd drilled 10 deep boreholes to a total of 3,752 metres underground, through its subsidiary, Lochinvar Coal Limited, on the Scottish/English border near the town of Canonbie, to estimate coking coal quantities and access . This follows drilling by The National Coal Board, British Geological Survey, and Greenpark Energy between 1979 and 2009.

2014: NAE Ltd conducted a scoping study, subsequently updated in 2017.

2014-2016: Coal prices fall to historic lows of USD$70/tonne and NAE Ltd put the project on hold as it was unable to raise funding. Prices remained volatile up to 2019, reducing investor confidence.

2019: NAE Ltd conducted a “Project optimisation study” and touted for partners or investors to finance the development of a coal mine—then the UK and many countries went into lockdown as the pandemic was responded to.

2020: NAE Ltd paid a £13,800 application fee to the coal authority for a coal mining and exploration conditional licence.

2021: JHD Exploration Ltd Dumfries and Galloway Council (within which the Lochinvar test-drilling took place received) for the first time since 2013 to notify them of test drilling.

2022: NAE Ltd had its conditional underground licence renewed by the Coal Authority on 21 January 2022—just 4 days before issuing the Aberpergwm coal mine expansion, in Wales, a full licence. This occurred in a changed context of increases in the price of coal through 2021-22, sanctions on Russian coal has driven demand for alternative sources, production has ramped up post-lockdowns, and the UK Government is broadcasting a more favourable approach towards new coal projects again.

Going forward...

2023-2024: Between 2023 and early 2024 NAE Ltd aim to secure planning permission.

2025: Towards the end of 2025, NAE Ltd aim to begin extracting coal.