Powerfuel Plc, the owner of Hatfield Colliery and Powerfuel Ltd, has gone into administration, it was announced today.
Richard Fleming and Brian Green of KPMG have been appointed as joint administrators and said today that neither Powerfuel Mining nor Powerfuel Power are in administration and that the 380 people employed have not been made redundant.
Richard Fleming, "The central goal of the administration is to sell the share capital of the mining and CCS development project which sits in Powerfuel plc, the parent company. The day-to-day business of both Powerfuel Mining and Powerfuel Power will not be affected by the sales process.
"Developing low carbon energy generation requires a large amount of capital up front and the CCS development falls £635 million short of the investment needed to progress the project beyond the preliminary stage. The substantial funding gap has not been addressed in the past 12 months and accordingly the project has stalled. The administration will enable a sales process to find a new owner, who can both take the CCS project forward and buttress the mine, which also requires around £30 million of capital expenditure for works improvements.
"CCS is projected by the Department on Energy and Climate Change to be one of the cheapest forms of low carbon energy generation. Powerfuel plc boasts the only licence to trial the technology in the UK. While the economic environment is still challenging, we are hopeful that we can secure a sale of both companies and will be actively speaking to interested parties from today."