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Case update 10 August 2023

Millions go to shareholders linked to illegal mine

Coal Action Network

REVEALED: Firm pays out £50m while leaving a massive hole in the fund to restore the mining site.

A Good Law Project investigation has found that the company running an illegal coal mine in South Wales has chosen to pay out £49.89m in dividends and royalties, while the restoration fund faces a shortfall of at least £60m.

The Welsh Government only granted planning permission for a mine at Ffos-y-Fran in 2005, after the original coal operator agreed to redevelop the site into green hillside after mining stopped.

The local council revealed last year that Merthyr (South Wales) Ltd, who subsequently took over the site, had only paid £15m into the fund, while estimates of the clean-up bill have ballooned to between £75m and £125m.

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But since 2017, according to company accounts, the firm has paid out an eye-watering £41.5m to its parent company in dividends. This parent company, Gwent Holdings Ltd, is controlled by the same family that runs Merthyr (South Wales) Ltd, and in March reported cash holdings of £81.7m. In the past three years, the mine operator has also paid out £8.39m in “royalties” to a firm controlled by its director, David Lewis.

Meanwhile the company argues that the “insufficient funds” set aside for restoration mean that they should continue mining at the site, even though planning permission ended almost a year ago. Estimates suggest that more than 300,000 tonnes have been extracted illegally since September 2022, prolonging an experience residents have described as a “local and environmental disaster”.

The shortfall could result in a huge liability for Merthyr Tydfil council. Having paid for this mine with their health and wellbeing over the last 16 years, local people face paying once again.

Merthyr (South Wales) Ltd did not respond to our request for a comment.

With the climate crisis accelerating around us, it’s crazy to still be digging for coal. We’re taking action to stop this illegal mining in South Wales. Can you help us put an end to companies making a profit at the expense of people’s health?

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Join Good Law Project, Coal Action Network and the people of Merthyr Tydfil to challenge this illegal coal mining operation and get justice for the local community. You can donate to this case here.