New fears over restoration of Wales’ biggest opencast mine as company fails to file accounts

Martin Shipton

Fresh concerns have been raised about the restoration of what was Wales’ largest opencast coal mine because the company that ran it is nearly four months late in filing its annual accounts.

According to its previous accounts, Merthyr (South Wales) Ltd has set aside more than £91m for the restoration of the former Ffos-y-fran mine near Merthyr Tydfil.

Despite that, the firm submitted a planning application for a much slimmed down scheme that would cost only £15m.

Last month the Welsh Government decided to “call in” the application, which means that its planning arm will consider it, rather than Merthyr council.

An entry on the Companies House website shows that the annual accounts for Merthyr (South Wales) Ltd for the year ending December 30 2024 should have been filed by December 30 2025.

There has already been an application by the Registrar of Companies to strike the company off from the register of active companies, but the application has been suspended because of an objection, presumably from the firm itself.

Merthyr (South Wales) Ltd is owned by the controversial businessman David Lewis.

Last year Nation.Cymru reported how he had a conviction for defrauding a bank of £88,000 to fund his gambling addiction and how recently he had assaulted an elderly solicitor outside his Newport office.

In addition a whistleblower said that illegal toxic waste had been dumped at the Ffos-y-fran site.

In 2024 the Senedd’s Climate Change, Environment and Infrastructure Committee published a report that described the “epic mismanagement” of the Ffos-y-Fran mine, saying nothing similar must be allowed to happen in any community in Wales.

The licence to extract coal from the site 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, Merthyr (South Wales) Ltd pledged to fully restore the site after it finished operations.

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 up to £120m, and despite the original restoration promises, the company has since 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.

Rejected

The Coal Action Network (CAN), an organisation that campaigns against harm to the environment and communities caused by extractive industries, has called for the scaled-down restoration proposal to be rejected.

A briefing document produced by CAN states that if the application is approved, the 58,000 residents of Merthyr Tydfil “will lose nearly £100m in restoration works promised to them, and allow that to be siphoned into windfall profits for a private company that would leave behind three more coal tips to blight South Wales’ landscape, burden the taxpayer, and drive fear into the communities living close by.”

According to CAN, the new application offers minimal works which the company will not provide additional funding for – it would be funded by a comparatively small £15m fund held jointly by the council in an escrow account. CAN states: “This fund was intended to be used to carry out only critical works in case the operator abandons the site entirely. The council changed the terms of this fund in 2024 so it could be released to the company, probably to prevent the company abandoning the site – a concern the council voiced to Welsh Government Ministers in 2023. To reduce the restoration from £75-£120 million down to £15m, the new plan would:

* Abandon the mining void recently flooded by Merthyr (South Wales) Ltd. This could reach 1.14 million cubic metres of mine water – or, adjusting for the potential effects of climate change, 1.5 million cubic metres of mine water. The flooded void could reach an elevation of 286 metres. The closest edge of the flooded void to inhabitants’ homes is 320 metres.

* Leave behind three coal tips that comprise a total of 37m square metres of colliery spoil, soil, and other material. These coal tips tower above nearby residents of Merthyr Tydfil by up to 210 metres. The closest edge of tip 1 is just 600 metres from inhabitants’ homes and has already suffered substantial collapse on one side.

* Leave an excavated and exposed coal face cliff with a sheer drop of around 150 metres into the flooded void.

Referring to windfall profits made by the company, the briefing document says: “Merthyr (South Wales) Ltd’s most recent, publicly available, financial report states: “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 December 31 2023, indicating record profits the year before.

“Its ultimate parent company, Gwent Holdings Ltd, whose two directors are David Lewis’s wife Jayne and brother Andrew, reported “The average coal price achieved increased by 94% to £151.66 per tonne” in its 2022 filing. For the complete avoidance of doubt that Merthyr (South Wales) Ltd fully budgeted to fund the agreed restoration, its 2022 financial report states: “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.”

Coal sales

The briefing document states: “The funding for Ffos-y-fran’s restoration was based on the sales of coal up until the end of its planning permission in September 2022 – but Merthyr (South Wales) Ltd continued illegally mining and selling coal for over a year after that, even outside its licensed area, profiting from an extra 640,000 tonnes of coal. It is therefore, even less credible that the company is unable to fund the standard of restoration it agreed to deliver.

“In the face of all this, and with no evidence made public, Merthyr (South Wales) Ltd’s representative claims: ‘It was established that there are insufficient funds available to achieve the 2015 restoration strategy and therefore an alternative scheme is required.’

“In an attempt to greenwash the new application to evade the cost of returning the coal tips to fill in the mining void, the company points to the emissions saved by earth-moving HGVs burning diesel. However, the emissions spared by leaving behind three colossal coal tips overshadowing 58,000 people would amount to just 2% of the illegal coal mining Merthyr (South Wales) Ltd did over 15 months after its planning permission expired. If the void is filled in with the coal tips, as per the agreed restoration plan, it would also provide a greater carbon sink cancelling out the CO2 of these earthworks even more.”

The briefing document concludes: “The new downgrade proposes to permanently leave huge health and safety hazards in a landscape that is in easy walking distance from the population of Merthyr Tydfil, even encouraging the public into this area.

“There are tangible risks to life and limb from a very deep flooded void, to a sheer cliff edge and massive coal tips, one of which has already suffered a large slip.”

Critical information

Responding to the company’s failure to file its most recent accounts, Daniel Therkelsen, CAN’s Campaigns Manager, said: “Merthyr (South Wales) Ltd misled the local council about its illegal mining operation, refused to hand over critical information to public bodies unless they signed secretive gag-clauses, and is now long-overdue filing its accounts. From fraud to physical assault, and accusations of burying hazardous waste, why does David Lewis think he – and his company – are above the laws that normal people have to abide by?

“A public land restoration project valued at between £75m and £120m hangs in the balance at Ffos-y-fran, so the public right to see for themselves that justice is being done has to be upheld to maintain trust in the public bodies and laws of the country.”

Mr Lewis has been invited to comment.