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Hatfield Coal Mine re-opens

Thursday, July 5th, 2007

White & Case advised VTB Bank Europe plc on its £50 million medium-term project finance facility to Powerfuel Mining Limited, a wholly owned subsidiary of Powerfuel plc, to finance the re-opening and operation of the Hatfield Colliery in Doncaster, as well as financing the development of a proposed business park on the same site. The re-opening of the Hatfield coal mine is part of a wider project under development by Powerfuel plc for the coal mine and power in the area.
Hatfield colliery first opened in 1908, but increasing extraction costs saw it lose out to oil and gas, leading to its closure in 2004. However, rising coal prices have made the fuel economic again and once re-opened, the colliery will produce 2.2 million tonnes per annum and will be among the lowest cost coal producers in the UK. In addition, 350 jobs will be created for local coalminers.
“Coal prices have shot up in the last couple of years as a result of depleting natural gas reserves in the North sea and the high cost of importing gas from the Middle East and Africa. Coal is set to play a considerable part in generating UK electricity over the next decade, which in turn has led to a resurgence in investor demand for UK coal,” commented Jason Kerr, the lead White & Case partner advising on the transaction. “The clean coal technology being employed, combined with the employment opportunities on offer, only further highlight the advantages of the Hatfield project.”
The White & Case team working alongside Jason Kerr included associates Chris Langdon, Carina Radford and Claire Sellars and trainee solicitor Richard Blackburn. In addition Quentin Gwyer, an associate in the Firm’s Real Estate practice, advised on the property aspects of the transaction.
White & Case has extensive project finance experience in the mining and metals market. Highlights of the Firm’s recent work include: advising aluminium company Global Alumina Corporation, in connection with the issuance of a two-thirds interest in its subsidiary, Guinea Alumina Corporation, Ltd., to DUBAL, BHP Billiton and Mubadala Development for a total issuance price of $260 million; advising Kazakhmys Plc, a Kazakh copper mining corporation, on its $260 million offer to purchase all of the issued and out-standing shares of Eurasia Gold, a Canadian gold mining company listed on the Toronto Stock Exchange; and advising BNP Paribas on its $500 million refinancing of the construction of the RUSAL Khakas aluminium smelter, the first aluminium production facility to be built in Russia in the past 20 years and the longest tenor project financing in Russia to date.

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