Dealing with Mining Operations

November 1997 

82.25 General

Whenever the insolvent was involved in mining operations there are various matters the official receiver must consider before taking any action in relation to the mine which are are set out in this part of the chapter. In addition he should consider the contents of parts 1 to 3 in respect of any waste substances on the insolvents’s premises. The official receiver should immediately upon appointment in relation to an operating mine contact the local office of The Environment Agency. The Agency should be given full details of the operation. In the event of any difficulties arising, the official receiver should consult Technical Section without delay.


82.26 Licence to operate a coal mine

A licence to operate a coal mine is not property for the purposes of the Insolvency Act 1986 except for certain limited purposes. It is to be regarded as property to the extent that the licence authorises the office-holder in the licensee’s insolvency to carry on the mining activity or to enable the transfer of the rights and obligations of the holder of the licence to a third party. In bankruptcy cases, to the extent that the licence is not property, it will not vest in the trustee and thus the trustee will not be liable under the licence conditions and to the extent that it is property, it can be dealt with or disclaimed. As far as companies are concerned, a coal mining licence will still remain vested in the company, but the liquidator will not have power to deal with it except to the extent that it is to be regarded as property by virtue of section 36 of the Coal Industry Act 1994.

Notes: [s36(1) Coal Industry Act 1994]


82.27 Pollution from mines

The official receiver should not turn off any dewatering system which prevents a mine from flooding due to the potential pollution of such action and risk of prosecution. Once such machinery is switched off, often it cannot be reactivated without considerable effort and expense. Without a dewatering system, discharges from the mine might cause pollution of controlled water which may be a criminal offence under section 85 of the Water Resources Act 1991. If the official receiver is responsible for switching the system off, he could be liable as the person causing the pollution. The official receiver should ensure that he acts reasonably to avoid causing pollution and should consult Technical Section immediately if any difficulties arise.

Notes: [s85 Water Resources Act 1991]


82.28 Abandonment

Usually six months prior notice should be given to The Environment Agency before a mine is abandoned. Abandonment includes ceasing to use a dewatering system; however, it is not recommended that the official receiver switch off such a system (see paragraph 82.27). The official receiver, in whatever capacity he is acting, does not commit an offence if he fails to give six months prior notice where he is the operator of the mine, if he gives notice as soon as practicable (see below). ‘’Operator’’ is interpreted widely to cover the position where an insolvent company, partnership or bankrupt has caused or is causing:

(I) the working of a seam, etc;

(ii) the use of any shaft or outlet of the mine;

(iii) the operation of a dewatering system;

(iv) the use of the mine for any other purpose, for example leisure.

The official receiver must give notice to The Agency as soon as reasonably practicable (which may be before or after abandonment). The official receiver should endeavour to give notice before abandonment. Section 91B EPA 90 indicates that an advertisement is required to be published in one or more newspapers in issue in the locality of the mine and that Regulations are to be issued detailing the prescribed particulars of or relating to the notice of abandonment which should be included in that advertisement. The Regulations have not been issued to date. A Technical Notice will be raised in due course advising staff of the information to be included in that advertisement. The Regulations have not been issued to date. A Technical Notice will be raised in due course advising staff of the information to be included in such an advertisement as set out in the Regulations, once issued.

Notes: [s58 EA 95 amending the EPA 90 to insert new sections 91A and 91B]


82.29 Disclaiming a mine

Where the official receiver uses his power of disclaimer it will not be deemed to be an abandonment of the mine so that notice to The Agency and an advertisement are unnecessary (see above). However, if the official receiver does disclaim an interest in a mine as liquidator or trustee, notice of the disclaimer should be sent to The Environment Agency. Full guidance on the procedure for disclaimers is given in chapter 34.

Notes: [s178 or s315] [Form 4.53 or 6.61]


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