Murky finances raise new fears over restoration of land at Wales’ last opencast mine

Martin Shipton

Fresh concerns have been expressed about the restoration of land at Wales’ last opencast mine as the company which ran it was made the subject of an application to wind it up.

Concerns centre on the site’s owner, businessman David Lewis, who we can reveal was recently given a police caution for assaulting a solicitor in his 70s.

Mr Lewis also has a conviction for defrauding a bank of more than £88,000.

Last year the Senedd’s Climate Change, Environment and Infrastructure Committee published a report that described the “epic mismanagement” of the Ffos-y-Fran mine at Merthyr Tydfil, saying nothing similar must be allowed to happen in any community in Wales.

The licence to extract coal from Ffos-y-Fran expired in September 2022 but local residents reported that the mine was still operating – illegally – many months after this before the site was closed in November 2023.

When it first opened, the company running the mine, Merthyr (South Wales) Ltd, pledged to fully restore the site after it finished operations.

Dividends

The committee heard evidence that since 2017, the company has paid out nearly £50m in dividends and royalties out of the business.

But with current restoration costs estimated at between £50m to £120m, and despite the original restoration promises, the company subsequently claimed that it was unable to afford this.

There are therefore concerns that the company will seek to evade its financial responsibilities and the cost of restoring the land will fall on the public sector.

Nation.Cymru has seen a memorandum written in 2007 to the then directors of Miller Argent Ltd – the previous name of Merthyr (South Wales) Ltd – that details what became a legal agreement between Miller Argent and the council, appearing to limit the company’s exposure to £15m.

Years later, in 2016, Miller Argent was bought by Mr Lewis,apparently using his wife Jayne as a conduit for the purchase.

A network of companies is involved in the ownership of the site and company accounts for the year ending December 2022 show that at that time £91m had been set aside for the land restoration. Recently a new planning application for the site was submitted by Merthyr (South Wales) Ltd to Merthyr Tydfil council.

However, the most recent set of accounts – up to December 2023 – have not been filed and are overdue at Companies House. As a result, there is an application to strike the company off the register of companies. The implications of that for the land restoration are unclear.

‘Low level restoration’

Daniel Therkelsen, campaign manager of the group Coal Action Network, said: “After 16 years of mining, dust, and noise pollution, Merthyr Tydfil deserves to have the promise of a high-quality restoration delivered to them. The new application documents, though, that the mining company, Merthyr (South Wales) Ltd, wants to gut the restoration to a “low level” restoration that would condemn Merthyr Tydfil residents to live below a water-filled void with a capacity of over one million cubic metres of mine water and in the shadow of three colossal coal tips containing 37 million cubic metres of colliery spoil, one of which has already suffered a significant landslip.

“The currently agreed scheme is valued at between £75m-£120m, which Merthyr (South Wales) Ltd is contractually obligated to fund and its annual accounts indicate it has been setting aside profits each year to deliver on that – even claiming tax breaks for doing so from HMRC.

“Instead, this new application for a “low level” restoration is to ‘be funded by the proceeds held in the escrow account’, amounting to just £15m and allowing Merthyr (South Wales) Ltd to enjoy tens of millions in additional profits, some of which was made during over a year of illegal coal mining. It is a matter of public record that the mining company can afford to deliver on its contractual obligation of a high quality restoration, so councillors must reject this attempt to cheapen the offer to Merthyr Tydfil by tens of millions, safety hazards and a scar on the landscape for generations to come.”

Closure

Mr Therkelsen added: “Merthyr (South Wales) Ltd has been threatened with closure for submitting its accounts late three times in recent years – following a clear pattern of routinely disregarding its legal responsibilities in accountability and transparency. It’s critical to remember this is the company that mined over 640,000 tonnes of coal for over a year without planning permission, and with impunity – yet, if a small company or a household is so much as an inch out of its permit, the council comes down like a tonne of bricks on them. One rule for Merthyr (South Wales) Ltd another for everyone else in Merthyr Tydfil isn’t how a planning system should operate.”

We sought a statement from Merthyr council, which told us: “The developer is undertaking restoration that accords with the approved Restoration Strategy from 2007.

“The council had no right to revisit the figure of £15m because it was secured as part of the planning permission by Welsh Government Ministers at the time, and unless a new planning application was submitted there was no opportunity to revisit this. The £15m was to be used towards restoration but was not set up to cover the full cost. It is, and always has been, the responsibility of the mine owner to ensure they have sufficient funds to cover the full restoration works.

“Merthyr (South Wales) Ltd are currently onsite and up to 40% of the land has already been restored under the original planning application. MSW has recently submitted a planning application incorporating a revised restoration strategy. All relevant issues will be considered as part of the planning application process, and the application will be presented to the planning committee for determination in due course.”

The council confirmed it was aware that David Lewis had named one of his companies Geraint Morgan Heritage Ltd, in facetious reference to the council’s solicitor. This came after the council took Merthyr (South Wales) Ltd to court, forcing it to pay the £15m it had agreed to pay towards the land restoration.

Concerns

We asked David Lewis to respond to the concerns expressed by Coal Action Network.

We also told him we were aware of his caution for assault occasioning actual bodily harm on the solicitor Robert Davies. The unprovoked assault took place outside Mr Davies’s office in Newport. We asked Mr Lewis to explain the circumstances of the assault and whether he regrets the incident.

We also pointed out to him that in 2003 he pleaded guilty to defrauding a bank of more than £88,000 and that he was described by the judge as “a pathological gambler who demonstrated pathological dishonesty”, and as a “spectacularly rash and reckless gambler, who gambled on anything that moved and lived”. We asked Mr Lewis whether he regretted his behaviour at that time and whether he had conquered his gambling addiction?

He was invited to respond by noon on March 7, but did not do so.

We also contacted Mr Lewis’s brother Andrew Lewis, asking him why he had been a director of the mine operating company for a short period, whether he had been a front man for his brother and why he had resigned his directorship after a few months. We also asked Andrew Lewis whether he was able to shed light on the discrepancy between the £15m paid into the escrow account and the £91m set aside for the remediation in the company accounts.

Andrew Lewis also did not respond by the noon deadline on March 7.