Restoration Bonds - Opencast Coal Mines
Wednesday 28th of January 2015 07:36
Over recent months there has been great public concern over opencast coal mines which have worked their coal reserves with none, or little restoration, being undertaken despite the fact that in the original planning consents a restoration plan was required as a condition of planning.
This problem is a direct result of the Coal Industry privatisation process and in order to understand the way the problem has developed the historical context needs to be understood.
The National Coal Board ( NCB ) and latterly British Coal Corporation ( BCC ) were nationalised industries and as such, because they were financially guaranteed by the Government, did not require a Restoration Bond to be deposited even though an agreed Restoration Plan was required as part of the planning permissions.
When tenders for the various elements of the Coal Industry were invited the costs of, and obligation for, restoration was transferred from the Government to the private Coal Companies with the assessed costs of restoration being deducted from the financial consideration paid. Effectively all financial responsibility transferred to the private companies.
This immediately created a problem with the Local Planning Authorities not holding any financial reserves for restoration obligations.
For whatever reason ( financial pressures, companies going into liquidation etc. ), during the years following privatisation, as some sites have been worked out monies have not been made available for restoration despite the fact that the original financial consideration paid reflected this requirement. On occasions this requirement for restoration has been unfairly used as a lever to obtain further planning permissions - "if you give us this, we will restore that "
The problems raised by the lack of restoration have been brought into sharp focus over recent years in Scotland with the demise of Scottish Coal and ATH and in South Wales at Park Slip and East Pit with the sites and restoration obligations being transferred offshore.
These practices have resulted in grave public concern over the adequacy of the current arrangements to avoid a repeat of the post privatisation restoration failings.
Current Restoration Bond Arrangements
- The Local Planning Authorities recognised this problem shortly after privatisation and as a condition of planning permission required the deposit of a Bond.
- As a result of uncertainties in the financial markets and the potential time delays involved when the Bond was in the form of an Insurance Bond the LPA’s insist on the Bond deposit be in the form of cash.
- All current opencast coal mining Restoration Bonds:
- Are in the form of Cash
- Access to the cash is by the LPA without recourse to the Company. This is always subject to the "Reasonableness Test”
- The level of the Cash Bond is assessed annually by independent consultants and includes all elements of the restoration – muckshift, site facilities, aftercare schemes and all other elements included in the agreed Site Restoration Plan.
- The level of the Cash Bond is assessed as the Restoration obligation a minimum of 15 months in advance with instalments to reach this figure paid monthly.
- The location of the Bond is at the discretion of the LPA in accordance with its financial rules and guidelines.
- The Bond is released as Restoration works proceed in accordance with the earlier points.
These arrangements for the Restoration of the Site following the cessation of mining are designed to ensure that the agreed Restoration Plan with timescales are within the control of the LPA’s and the problems post Privatisation cannot be repeated.