Alkane will acquire “certain coal mine methane assets” for an initial £5.5 million cash and has agreed to pay a further £2 million once the mine is fully closed and the shafts satisfactorily sealed, which is expected early next year, Alkane said Wednesday.
Liquidators for collapsed Scottish Coal named Hargreaves as preferred bidder for “various” company assets earlier in the month, but did not disclose which assets were involved.
Prior to that announcement, Hargreaves raised 42 million pounds to expand its operations and buy new mines. In December, it bought the rights to take over the assets of Scotland's second-biggest open cast mining firm, ATH Resources, in what has been a rapid expansion for the energy and waste group.
Chief executive Gordon Banham welcomed the disposal of the Maltby Colliery assets. He said: “We are pleased to announce the disposal.
“Alkane is well positioned to maximise the value of these assets and this has created the basis for a deal that is beneficial to both parties.
“This disposal constitutes an important step towards realising our asset disposal targets for Maltby, which we seek to continue with the disposal of the underground assets in due course.”
Nottinghamshire-based Alkane said the acquisition will significantly boost the amount of electricity it generates from coal mine methane (CMM) and increase its position as the largest independent operator of CMM assets in the UK.
The methane reserves of the Maltby colliery workings acquired by Alkane are estimated to be around 11.6 billion cubic feet and output will be used to produce electricity from an 11.2 MW unit, which will contribute to Alkane's portfolio of 70 MW of installed capacity.
The company raised the money from a £6 million share issue and the rest of the cost will come from existing credit facilities.
Neil O’Brien, chief executive officer of Alkane, commented: “This latest acquisition consolidates Alkane’s market-leading position in CMM and it adds significantly to the group’s core CMM operating capacity and provides an opportunity to further develop our Power Response business.”