Material logistics specialists, Hargreaves Services has seen continuing turmoil in its main area of operation. The company has had a challenging three years since the drop in coal and coke prices globally.
Hargreaves said it was losing money on some Scottish operations due to falling prices and “exceptionally challenging” market conditions.
Demand for thermal coal has remained exceptionally low from the closure of a number of United Kingdom power stations. Power stations were running at low capacity with big stockpiles. The company blamed rising costs from environmental laws for the closures.
In January 2015, the price of coal fell to a nine-year low of £39 per tone. That is £16 lower than the price when the company acquired its Scottish surface mines in spring of 2013.
With gas prices down, it said there was a “significant and unexpected reduction in coal burn by UK power stations” and the ability to predict future demand was “very poor”.
Due to the difficult markets, revenue ….
Hargreaves Services has had to transform its business model and diversify into other markets.
The future of Hargreaves is not all bleak. The company has announced this week that it will turn a former opencast mine into a new town in Scotland.
After a year of uncertainty, the company has been given planning approval and the go ahead to creating a major development comprising of over 3000 homes, a school, community facilities and a commercial units in East Lothian.
Gordan Benahm, chief executive officer of Hargraves as commented, “Blindwells is an important part of that portfolio and is an excellent and exciting site. The grant of planning permission now allows us to develop and commercialize the site, and we look forward to providing further updates and information as our plans progress.”