We got internationally renowned foresnic accountants, C. Lewis & Company, to analyse mining company Merthyr (South Wales) Ltd's accounts. Guess what? Not only can the mining company afford the full restoration, it has even set the money aside for it, and it can't legally spend it on anything else... unless the Council agrees to downgrade the restoration by granting the company's cut-price restoration application.

It's a stitch up! Don't let it happen

The new proposal was published on Merthyr Tydfil County Borough Council's website on Friday 21/02/2025. It is a plan to do as little as possible that would justify the company getting its hands on the £15 million currently held by the Council in an ESCROW account. But that £15 million was only intended to cover the barest necessities to make the site safe in case Merthyr (South Wales) Ltd goes bust. Merthyr (South Wales) Ltd hasn't gone bust though, and should be stumping up around £75-110 million to pay for the restoration.

1. Leave behind a flooded mining void (the void is 175m deep at one end) with capacity for 1 million cubic metres of water
2. Leave behind 3 overburden mounds (coal tips) containing approx 37 million cubic metres of colliery spoil, rock, and soil - around just 2.8 miles from the site of the Aberfan disaster, where a coal tip collapsed, killing 144 people. This would permanently alter the landscape beyond recognition from what it was before and the surrounding landscape.
3. Leave behind a huge exposed coal-face cliff. Other than being an eyesore for local people, rain will cause erosion over years expected to leach heavy metals and toxic elements from the coal into the flooded mining void that will discharge into local waterways.
4. An aftercare period of just 5 years - this must be at least 15 years to ensure any woodland planting that hasn't survived can be replaced and nurtured to maturity.

The Mining Remediation Authority (MRA) has stated that it does not consider coal tip extraction to be a ‘coal mining operation’ because it claims that coal tip extraction does not meet any of the requirements listed within the s.65(1) of the 1994 Act definition of a ‘coal mining operation’ or a ‘coal mine’. As a result, the MRA states that it has no power to licence or not licence mining a coal tip. And DESNZ adds that it does not plan to make any changes so that coal tip mining projects would require a licence from the MRA in future (based on the understanding it is not currently required, which is against our Barristers’ understanding).

This boils down to a difference in interpreting some heavyweight law that’s over 30 years old. Some of the argument hinges on whether you read a sentence such as “to be a thing, it must include the following: X, Y, ‘and’ Z” to mean it needs to be all of X,Y,Z to be the thing, or it’s enough for it just to be Y, for example. The only way to settle the argument is a costly court case with our Barristers on one side and UK Government Barristers on the other side – and the UK Government has much deeper pockets than us.

The civil servants within the UK Government are right now busy cooking up new legislation to ban the MRA from issuing any new licences for coal mining – which is great news because all coal mining needs a licence…so that means no new coal mining projects (existing licences can still be used). The problem is that it won’t ban mining coal tips, because of the MRA’s belief that this doesn’t require a licence in the first place. That means, once this new legislation passes, the only place coal can be mined in the UK is coal tips – which will still be fair game, undermining the intention of the coal ban to stop coal mining.

This is a particularly absurd situation as mining previously discarded coal from coal tips or mining new coal from opencast coal mines involves the same processes – moving large volumes of soil around with HGVs, separating spoil from saleable coal, transporting that coal etc. and generating the same local environmental and community impacts such as noise, dust, and disruption. It will also have the same climate change effects when burned. Mining coal tips is an industry that dates back until at least the 1980s. With over 5,000 coal tips around the UK and a live proposal to mine two coal tips in South Wales of over 400,000 tonnes of coal, we begin to understand why it matters whether coal tips are included within the new legislation to ban coal mining.

PLAN A
The easiest option would be for the civil servants beavering away at the new coal ban legislation to simply include an amendment requiring coal tips to need a licence (via clarification or change to existing legislation). This would bring coal tip mining, opencast mining, and deep mining all within the same requirement for a licence – which the new legislation would then ban in one swoop. Find out more about the simple legal wording our Barristers have suggested including to do this.

PLAN B
If Ministers and civil servants refuse to explicitly include coal tips within the new legislation, we are going to have to consider a legal challenge to the UK Government’s belief that mining coal tip doesn’t need a licence. If we win that, then mining coal tips would be banned within the new legislation by default. We hope you’ll support our fundraising efforts if we are forced to do that.

In our submission, we focused on the consequences today of old coal mines. Whilst we recognise the wealth it generated, much of that was kept by the Directors of mining companies whilst abandoning their restoration responsibilities to host communities. Our 2022 report ‘Coal mine restoration in South Wales’ documents this pattern in Wales’ recent past. We also highlighted the threat of new coal mining under the guise of remediation, as proposed in Bedwas, South Wales.

1. We explained that the cycle of mining companies letting down their host communities is not just a legacy issue, but is also a live issue. We commented on how perverse it would be to rely on profit-driven mining companies to fix the problems caused by those same profit-driven mining companies.
2. We highlighted that not all coal tips should be flattened – with unique and rare ecologies growing up around some of the older coal tips. Many coal tips are also stable and safe now.
3. We called for the UK Government’s coal ban to include ‘remining’ coal tips – as this shares many of the same characteristics as conventional coal mining.
4. We also recommended that the UK Government deliver more dedicated funding on an ongoing basis to the Welsh Government to monitor and remediate historic coal mining sites and tips.

We emphasised that the The Disused Mine and Quarry Tips (Wales) Bill, in its current form, carries the very real risk that it could encourage 'remining' so-called waste coal from coal tips under the guise of making those coal tips safe. There is a live proposal to do exactly this for two coal tips in Bedwas, Caerphilly. Read more about coal tip re-mining and safety.

Our message to the Senedd Committee: include a provision in this new Bill prohibiting coal extraction for commercial gain from disused coal tips.

Watch our session with the Committee to find out how the pros and cons of the new Bill, not least encouraging 'remining' coal tips which contain up to 643 million tonnes of coal, emitting up to 1.7 BILLION tonnes of CO2.

Mining company: Merthyr (South Wales) Ltd (MSW) is the current operator of the sprawling opencast coal mine, Ffos-y-fran, in Merthyr Tydfil, South Wales.

Claim: MSW claims "It was established that there are insufficient funds available to achieve the 2015 restoration strategy and therefore an alternative scheme is required." (EIA Scoping Report, July 2024). It is on this basis that a new application will be considered by Merthyr Tydfil County Borough Council.

MSW's 'solution': To downgrade the restoration scheme promised to surrounding communities to one that amounts to doing as little as possible. Even returning the tens of millions of cubic metres of coal tips to fill in the gaping void the company created and allowed to flood is considered "not feasible or economic" (EIA Scoping Report, July 2024)

Why MSW is offering to do any works: Merthyr Tydfil County Borough Council holds £15 million in an Escrow account that it forced MSW to pay into (by court order). This was never intended to fund the original restoration agreement costed at £75-120 million, but that is what's happening now as MSW is claiming the company doesn't have the finances to pay for the restoration it previously agreed to fund. MSW wants this £15 million so is proposing a massively downgraded restoration plan and presenting this as the only option so the Council will pay this out to them. The Council is afraid the company will walk away if it is compelled to honour its contractual agreement to fund the restoration itself. If that happens, the Council would have to pay a new company to come in to restore the site, which'd cost more.

Our recommendation: Merthyr Tydfil County Borough Council has refused to pursue MSW to deliver on the contractually agreed level of restoration, and is poised to consider a downgraded plan by MSW which would affect surrounding communities living in Merthyr Tydfil for generations. Haven't they put up with enough after 16 years of coal mining, dust, and noise pollution? The Welsh Government urgently needs to launch an inquiry MSW finances and the Council's actions, issuing a 'holding directive' to prevent the Council approving the downgraded plan in the meantime.

To our knowledge, there has been no evidence submitted by MSW that it cannot fund the full restoration it is contracted to undertake. On the contrary, MSW's most recent, publicly available, financial statement on Companies House says "during the year the directors again reassessed the restoration provision based on current operating costs in particular diesel prices which have decreased significantly and increased plant hire costs, which as a result increased the restoration provision by £0.2m to £91.2m",  by 31 Dec 2023, admitting record profits the year before, with its ultimate parent company, Gwent Holdings Ltd, reporting "The average coal price achieved increased by 94% to £151.66 per tonne" in its 2022 filing. This funding for restoration was based on Ffos-y-fran closing at the end of its planning permission in September 2022 - but it continued illegally mining coal for over a year after that, and even outside its licenced area, selling an extra 640,000 tonnes of coal - driving profits even further.

It's been claiming tax discounts to HMRC each year by phasing expected restoration costs that it now refuses to pay. This report goes on to say "The total costs of reinstatement of soil excavation and of surface restoration are recognised as a provision at site commissioning when the obligation arises. The amount provided represents the present value of the expected costs.".

This very much sounds like the company able and prepared to pay the restoration costs, and had already claimed tax discounts for it. So why is the company being allowed to duck tens of millions in what it owes?

As is typical of the mining industry, operations and financing is done through a complicated constellation of interconnected companies owned by family members (depictions of which are illustrative only and not based on any likeness). This kind of practice could help evade liabilities - though we're not suggesting that was the intention here. The following information is accurate to the best of our knowledge, please refer to Companies House for confirmation/further details:

• Merthyr (South Wales) Ltd
  • Company number 04261274
  • David Stanley Lewis - Director and shareholder
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Named operator of Ffos-y-fran

• MERTHYR (NOMINEE NO.1) LIMITED
  • Company number 04261269
  • David Stanley Lewis - Director as of August 2024
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Dormant company subsidiary of Merthyr (South Wales) Ltd

• Ffos-y-fran (commoners) Limited
  • Company number 04892620
  • Jayne Helen Lewis – Director
  • Andrew John Lewis - Ex-Director
  • Dormant company subsidiary of Merthyr (South Wales) Ltd

• Merthyr (Ffos-y-fran) Limited
  • Company number 06353565
  • David Stanley Lewis – Director
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Dormant company subsidiary of Merthyr Holdings Limited

• Merthyr Holdings Limited
  • Company number 06330412
  • David Stanley Lewis – Director
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Subsidiary of Gwent Investments Limited
  • Holding company

• Gwent Investments Limited
  • Company number 08936878
  • David Stanley Lewis - Director
  • Jayne Helen Lewis and Andrew John Lewis - Ex-Directors
  • Investment company

• Gwent Holdings Limited
  • Company number 10119615
  • Jayne Helen Lewis and Andrew John Lewis – Directors
  • Ultimate parent company of Merthyr (South Wales) Ltd

1. The Bill should include a provision prohibiting coal extraction for commercial gain from disused coal tips to prevent the unintended potential for the Bill to encourage an industry oriented towards ‘re-mining’ disused coal tips under the guise of preventing future instability,
2. The Bill should be accompanied by a full Climate Change Impact Assessment and Carbon Impact Assessment, given the potential of the Bill in its current form to encourage applications for coal tip ‘re-mining’.
3. It is vital that the design and execution of stability works on coal tips prioritise minimising potential impacts on the wellbeing of typically socio-economically disadvantaged communities – for example in operating hours, HGV movements, flora clearance, restriction of public access to green spaces etc.

To prevent disused tips from threatening human welfare through instability. The aim is for the Bill to be preventative and proactive rather than reactive. The first section of the Integrated Impact Assessment discusses the need to anticipate impacts of climate change on tip stability, such as the trend of increasing rainfall and storms. It seeks to do this by:

1. monitoring registered disused tips, with inspections increasing in frequency relative to their risk levels.
2. maintaining tips to promote stability.

• Set up as a ‘body corporate’ (a form of company with its own distinct legal entity, and could be any of five possible types of company)
• Activities: oversees the assessment, registration, monitoring, and oversight of disused tips
• Scope: human welfare put at risk due to tip instability or threats to tip stability
• Powers includes:
  • to require a landowner to make tips stable or prevent tip instability
  • for the Authority to make tips safe
  • obtain (via a contribution order) and make payments (in compensation) relating to coal tip stability and instability issues or events
  • entry to land to undertake its activities
  • requiring and sharing information
• Enforcement: the Bill creates related offences to make the regime enforceable

The current categories of R,A,B,C, and D would be replaced by a simpler two-step assessment process. The first step would be a desk-based risk assessment, the results of which may recommend a subsequent full assessment.

Key changes introduced by the Bill include:

• Creates a distinct Authority
• Lowers the threshold to intervene in coal tip stability
• General duty to ensure the safety of coal tips
• Power to require tip owners to carry out preventative maintenance to prevent a tip becoming a danger
• Allows local authorities to carry out tip works

Context 1
The Integrated Impact Assessment claims the Bill does not deal with coal tip remediation, and does not increase the likelihood of movement and potential combustion of coal that can accompany coal tip remediation. The Assessment goes further to state that the Bill’s preventative action will reduce the need for coal tip remediation and works required after coal tip slips. Coal Action Network believes these claims to be sincere but inaccurate.

Coal tip remediation involving coal removal and earthworks is presented as a solution to permanently prevent future coal tip instability. It does not substantively differ from other actions such as irrigation to prevent instability.

The UK Government’s proposed coal licencing ban wouldn’t currently prevent ‘re-mining’ coal tips. Additionally the patchwork of laws and policies in Wales is failing to prevent mining companies extracting coal or bringing new applications for coal mining and extensions in the past few years, with Local Planning Authorities shouldering the burden. This Bill may inadvertently increase pressure on resource-strapped Local Planning Authorities by fuelling a new wave of coal extraction applications, such as the current proposal by ERI Ltd to ‘re-mine’ two coal tips in Bedwas in a practice that dates back to at least 1984.

ERI Ltd is a private company offering to permanently remove tip stability risks at no charge to the landowner (Caerphilly Council) in return for selling the extracted ‘waste coal’, which we believe would be an attractive prospect to other landowners facing coal tip liabilities under the new Bill too.

Our recommendation 1
To prevent the unintended potential for the Bill to encourage an industry oriented towards ‘re-mining’ disused coal tips under the guise of preventing future instability, we recommend that the Bill includes a provision prohibiting coal extraction for commercial gain from disused coal tips.

Context 2
In our context to recommendation 1, we outline how – in practice – the Bill may fuel an industry oriented towards ‘re-mining’ coal tips. As a result, the decision to exclude a full Climate Change Impact Assessment and Carbon Impact Assessment from the Bill’s Integrated Impact Assessment should be reversed.

Our recommendation 2
The Bill should be accompanied by a full Climate Change Impact Assessment and Carbon Impact Assessment, given the potential of the Bill in its current form to encourage applications for coal tip ‘re-mining’.

Context 3
Over 85% of disused coal tips (and 90% of coal tips with higher stability risks) in Wales are located in the South Wales valleys, and – according to the Welsh Indices of Multiple Deprivation – are based in communities classed as amongst the 10% most deprived in Wales. As the Government’s Integrated Impact Assessment outlines, preventing coal tip slips would benefit lives, land, and housing in these areas.

Our recommendation 3
To realise this benefit, it is vital that the design and execution of stability works on coal tips prioritise minimising potential impacts on the wellbeing of these socio-economically disadvantaged communities – for example in operating hours, HGV movements, flora clearance, restriction of public access to green spaces etc.

Coal tips, also known as coal spoil or slag heaps, and overburden are large mounds of waste soil, rocks, and fragments of coal that was dumped there as it was originally in the way between a mining company and the profitable coal it wanted to mine. Sometimes, mining companies promised to return these coal tips down the holes or into the voids they created, but often claimed bankruptcy or found loopholes to avoid this costly process. There are over 2,500 coal tips peppering Wales alone.

The coal tip slip in the town of Cwmtillery on Sunday 24th November 2024 occurred during Storm Bert, which brought intense rainfall. The coal tip is Category D, which means it is monitored every 6 months – and the last report did not flag any major issues. It follows on from the coal tip slip in 2020, which sent 60,000 tonnes of soil and rocks tumbling in Tylorstown, Rhondda Cynon Taf. That compares with 40,000 tonnes of debris that were dislodged and tumbled into a school in the infamous Aberfan disaster of 1966. Unlike the Aberfan tragedy, the two recent coal tip slips luckily resulted in no loss of human life.

What each of these coal tips have in common is that they occurred after a period of heavy rain. Leader of Blaenau Gwent council Steve Thomas commented on the recent coal tip slip in Cwmtillery, saying "We can confirm that we are dealing with a localised landslide believed to be caused by excess water as a consequence of weather experienced during Storm Bert."

Geologist Dr Jamie Price explained: "Both more prolonged and more intense rainfall events will heighten the risk of coal tip collapses….Increases in the moisture content of the coal tips and increases in groundwater level in general can affect the stability of these coal tips and could induce failure and collapsing of the coal tips."

A Cabinet Statement by the Welsh Government in 2023 stated “Winter rainfall has increased in Wales in recent decades, and the Met Office predicts that it will increase further as a result of global warming.”. By 2050 it's thought it could get 6% more rainy in winter in Wales, with as much as 13% more rain by the 2080s. Human-induced climate change made the heavy storm downpours and total rainfall across the UK and Ireland between October 2023 and March 2024 more frequent and intense, according to a rapid attribution analysis by an international team of leading climate scientists. This is exactly what we recently experienced with Storm Bert which led to the most recent coal tip slip in Cwmtillery.

ERI Ltd is a mining company that’s seized on community fears in Bedwas, South Wales, to propose mining two of coal tips in the area of around 500,000 tonnes of ‘waste’ coal contained within them on the promise of levelling out the coal tips afterwards. ERI Ltd is tempting Caerphilly County Council with the offer to do this at no cost to the Council, claiming it’ll use a portion of the profits gained by selling the coal it removes from the tips. The problem with this approach is:

1. ERI Ltd is driven by profit, not community concerns so will leave the coal tip closest to Bedwas residents, likely because this wouldn’t be as profitable for the company to mine.
2. Not all Category D coal tips have stability risks – having a one-size-fits-all ‘level it’ approach could needlessly decimate vital ecologies that have slowly emerged around many coal tips over the decades.
3. There is a strong pattern of coal companies abandoning their remediation promises as soon as they’ve sold the coal – which is why thousands of the coal tips exist today. ERI Ltd has little in assets to seize if it does abandon the site years from now. Just this year, Merthyr (South Wales) Ltd abandoned its remediation promises amidst record profits. Similar to ERI Ltd’s proposal, the Ffos-y-fran coal mine was billed as a project to remediate derelict land through coal extraction, but has left it infinitely worse.
4. Coal is the dirtiest fossil fuel and still the number one fossil fuel driver of climate change globally. If coal tip remediation is allowed to be used as a smokescreen for new coal mining, it’ll contribute to fuelling the climate change that’s threatening the stability of all coal tips.

Published: 27. 11. 2024