A Midland development company has shelved plans for a major housing development on a former industrial site and is instead going into the coal mining business.
Maximus, headed by entrepreneur Dick Hickton, is set for an unexpected windfall following the world rise in commodity prices.
The company, based at Sinton Green in Worcestershire, has been planning to build hundreds of homes on a site at Clay Cross in Derbyshire.
It always knew there was coal there but that didn’t seem particularly important. But now with the housing downturn and the spot price for coal on the Rotterdam market, the world’s benchmark, at more than $180 a tonne, Maximus is looking to make serious money.
It estimates there is 150,000 tonnes to be taken out which will take 12-18 months to extract. That amounts to £13.7 million less the cost of the surface extraction.
Mr Hickton says a planning application will soon be going to Derbyshire County Council. He noted: “The application will be submitted as part of the remediation strategy to clean up the site. That will incorporate removal of the coal.”
The plan is probably to sell to various distributors rather than send it direct to a power station. The coal is a remnant from the 19th Century when Clay Cross was a mainly rural area. But George Stephenson, the railway pioneer, changed that.
While driving a tunnel under Clay Cross Hill for his main line from Derby to Leeds, he discovered a rich seam of coal and iron deposits and exploited the finds, forming the Clay Cross Company in 1837.
George Stephenson and Co built houses for the tunnel navvies and later, as they sank colliery workings, for the miners and their families.
Some 400 houses were built, and by 1846 the population of the area had reached 1,478. An ironworks with steam engines for blowing, pumping and hauling kept some 600 men employed.
But because of buildings above it, not all the coal could be got out.
The 240 acres now owned by Maximus is centred on a former manufacturing site, now derelict. It was previously home to Biwater, a maker of spun steel pipes, but the plant closed in 2002.
Once the coal is taken out and the site cleaned up – Mr Hickton reckons it will cost £3 million to decontaminate it – the hope is that by then the housing market will have picked up. The aim is to build 1,300 homes, for which planning permission was obtained in 2006.
There will also be offices, hotels, factories, a country park and sports complex.
In total it is estimated the scheme is worth around £80 million and could create up to 3,000 jobs.
Maximus managing director Paul Jones said: “The market has moved away from us in terms of housing, but we always knew there was coal there. With the upturn in commodity prices, coal has risen in line.”
He said it had previously been marginal to consider extraction but that had now changed.
“It is now viable and should prove extremely lucrative. However, we have always had the ability to look beyond the purely property aspects and take a wider perspective.
“The company has true entrepreneurial in spirit and is fleet of foot and it was just a case of thinking laterally and switching direction.”
Maximus has a £100 million combined investment and development portfolio.
Mr Hickton is one of the Midlands’ most colourful characters.
Oldbury-born, he is also a chicken farmer producing 120,000 birds every 40 days for supermarket group Morrisons, and hails from a family who still have a presence on Birmingham’s markets.