Problem at pit hits shares at Hargreaves

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The Independent Online

Shares in Hargreaves Services, the coal logistics group, plunged by a third yesterday after major problems at its Maltby mine forced it to post a profits warning.

Hargreaves bought the South Yorkshire mine from UK Coal in 2007. At the time, UK Coal said Maltby had lost £18.2m in the previous year, mainly because of geological problems.

Yesterday, however, the company admitted it had encountered "unusual geological conditions". As a result, it has pulled back the coalface for the sake of safety, with production delays of up to four months which will wipe up to £16m from next year's profit.

"Maltby has never encountered such conditions before and the issue appears to be localised to this section of the mine," Hargreaves said.

"The short and medium-term mining plans for Maltby will continue to be reviewed," it added.

Gerry Huitson, the production division director, added: "This is a very unusual situation and to our knowledge this has never happened before in Maltby's long 100-year history."

The chief executive Gordon Banham said he was "bitterly disappointed." The shares fell 299p to 760p.