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Claims have been made that the mining company behind the Ffos y Fran opencast coal mine does have the money required to carry out a restoration estimated to cost more than £90 million.

Campaign group Coal Action Network says findings from a forensic accountancy firm it commissioned show that Merthyr (South Wales) Ltd, the company behind the site, has the financial means to fund the restoration originally agreed in 2015.

The group says the company has claimed since 2023 that it does not have the finances to fund the £91.2m restoration of the 400-hectare site. Coal Action Network alleges the company is using this claim to pressure the local council into approving a significantly reduced restoration plan, which it says would leave behind a heavily damaged landscape including three large coal tips, a polluted flooded void, and a 100-metre exposed cliff edge.

Coal Action Network instructed international forensic accountancy firm C. Lewis & Company to examine the company’s claims that it cannot afford the agreed restoration.

A document outlining the firm’s findings states that, as of December 31, 2023, the company director signed off the financial statements of Merthyr (South Wales) Ltd, confirming that his best estimate of the cost required to restore the Ffos y Fran site was £91.2m.

The document also states that the full amount of the estimated restoration cost had been loaned by Merthyr (South Wales) Ltd to another group company, Gwent Holdings Limited.

According to the findings, as of the same date, Gwent Holdings Limited still held cash in excess of this amount. The report states that if Gwent Holdings Limited were to repay what it owes, Merthyr (South Wales) Ltd would be able to fully fund the £91.2m restoration.

The document further states that even if Gwent Holdings Limited were to distribute all of its available profits — which it had not done at the time of writing — it would still retain around £67m in cash, which it could likely not distribute lawfully without wrongfully trading.

It adds that, together with £15m held in escrow, this would fund substantially all of the £91m required for the full restoration scheme. Even if the full amount was not held in cash, the report states the company would have assets that could, in principle, be used to fund the liability.

Coal Action Network says the conclusion is that the company can, and is legally required to, fund the restoration, and that the simplest way for it to avoid doing so would be to persuade the council to agree to a reduced restoration plan.

The group says allowing this to happen would send a message that “polluters don’t pay”, particularly as oil and gas fields begin to close in the North Sea.

Daniel Therkelsen, communications manager at Coal Action Network, said: “With forensic accountants concluding that Merthyr (South Wales) Ltd can fund the full agreed restoration, the council has no choice but to refuse the mining company’s attempt to get off the hook.

“Anything less than an outright refusal would make planning councillors responsible for the coal tips, flooded void and sheer cliff edge that would otherwise be left behind, and the serious risk this would pose to young lives.”

Merthyr (South Wales) Ltd responded by saying Coal Action Network was attempting to undermine the planning system through “increasingly aggressive” tactics and a “media-led campaign” based on “unfounded, misleading and demonstrably inaccurate claims”.

The company said the financial figures quoted were historic and irrelevant to the current planning application.

Merthyr Tydfil Council said its position had not changed and that it would assess the application in line with planning legislation, policy and the public interest, adding that financial disputes between third parties were not matters for the local planning authority to determine.