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What to consider when doing your Coal Due Diligence

Planning Approval for the UK’s first deep coal mine in 30 years has caused much dismay, with the Government facing criticism  and some understandable consternation, particularly from environmentalists.  

The coal to be mined is coking coal which will be used in the short-term to make steel.  

Steam coal is used to make electricity. In December last year and again on Monday 23rd January, National Grid ordered three UK power stations to begin warming up in case they are needed to generate electricity. Power station operator Drax was asked to prepare two coal-fired units and EDF to warm up its West Burton plant. At the time of writing this article 3% of our electricity was being generated from coal. Currently the UK is burning steam coal imported from places as far away as Mozambique.  

Against a background of the war in Ukraine, who is to say what might happen in the future? Climate Change objectives take a back seat when the chips are down. Germany is already walking down this road by mining and burning more of its lignite deposits. Is there a scenario where we would start to mine our own coal again? 

Landmark Coal Reports can inform on the risk from past mining but only report on the risk from future mining when plans become known. Until they are published, the only way to we are able to make property owners aware is by reporting the potential. In residential reports we do this by reporting where the Coal Authority has granted a license. In our commercial reports we extend this by also reporting where rights to remove coal (Working Rights) have been granted. If Working Rights have been granted one of the barriers to mining coal has been removed and the risk is increased. 

With any form of mining, if you’re buying a property close to any site that has mined in the past or one that has the potential to be mined, undertaking desktop due diligence study to explore potential ground stability risks is a given. This becomes even more important when you are looking at commercial properties where, say, a disruption to your process can have long term impact on your business. 

Written by Phil Huddleston, Director of PinPoint Ltd

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