When the coal industry was privatised in 1994, a number of mining companies acquired the assets/interests of the former British Coal Corporation. These included options for leases of unworked coal at a number of sites, together with conditional licences to work the coal within the lease areas. The options can be exercised and the licences deconditionalised only after certain conditions precedent have been satisfied, one of which is the granting of planning consent to work the coal.
As you are aware, the gaining of a planning consent for opencast coal mining is increasingly difficult and the process time consuming; sometimes spanning several years. The majority of the options have still to be exercised and the prospect exists that some planning consents will not have been obtained before the options lapse on 31 October 2004.
The Authority has been considering what impact this will have on the industry and what its own action should be in respect of the coal covered by these options when they lapse.
Those mining companies which currently hold the options face the prospect of seeing them lapse in 2004, possibly after taking actions such as making planning applications and acquiring property interests in anticipation of working the sites. There exists the possibility, therefore, that some operators may "lose" rights in sites which form part of their future plans for coal production. Other mining companies may see the lapsing of these options as new opportunities for coal production, and intend to make application to the Authority for licences to work some of the sites, post 2004.
For the Authority’s part its actions are dictated by its duties under the Coal Industry Act 1994 which require it to promote competition and secure best terms reasonably available. It seems, therefore, that when the options lapse the Authority must follow its licensing procedures, by considering any new applications for licences, advertising for alternative expressions of interest and negotiating best terms reasonably available with the preferred bidder.
You may feel that writing on this issue now is premature, but the Authority considers that it, and the industry, should understand and address the issues arising from the lapse of these options sooner rather than later.
If you have any comments, queries or observations on this matter, I shall be grateful if you will write to me by the end of July 2001 at the address below.
200 Lichfield Lane, Berry Hill, Mansfield, Nottinghamshire, NG18 4RG.
Tel: 01623 638246 (dd) Fax: 01623 622072
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