"King Coal" Richard Budge is back. He is set to reopen a colliery in South Yorkshire with financial backing from Russia. He also has plans for an £800m "clean coal" power plant on the site.
One of Russia's largest coal producers, Kuzbassrazrezugol (KRU), has taken a 51 per cent stake in Mr Budge's latest venture, Powerfuel, which owns the mine at Hatfield, near Doncaster. It is Mr Budge's second attempt to reopen Hatfield - his previous company set up for the venture, Coalpower, went bust in late 2003.
Powerfuel had planned to list on the Alternative Investment Market to raise money but that is no longer necessary. It is thought that KRU paid about £29m for the stake, the private Russian company's first overseas acquisition.
Mr Budge said the Government "urgently" needed to revisit the case for coal-powered electricity generation. The coal industry in Britain has been decimated, first by the Thatcher government's assault on the sector in the 1980s and then the "dash for gas" in the 1990s. Mr Budge said: "Coal is far cheaper than wind power, even if you take into account the need to clean it up. And it works 95 per cent of the time, not 30 per cent like wind. It really is a no-brainer. Either you want the cheapest electricity or you don't."
He added that coal was important in helping to provide for a diversity of energy sources, vital for security. Ministers and officials are currently working on an energy review, which is due to be published this summer and is expected to back the case for nuclear power.
Powerfuel will refurbish Hatfield Colliery, which it bought in 2004, with the aim of restarting mining next year. The total cost of the scheme is estimated at £110m, which should create 350 mining jobs. The colliery will produce 2 million tonnes of coal per year by 2009.
Powerfuel estimated that there was 27 million tonnes of coal left at Hatfield, enough for 15 years of production.
The power plant, which would bury the carbon dioxide it produced in depleted North Sea oil fields, would have to be financed separately.
Mr Budge earned the King Coal sobriquet after he bought up most of the UK's remaining coal industry at privatisation in 1994 through RJB Mining. In 2001, he was ousted as head of RJB, which was renamed UK Coal.Reuse content