TURMOIL in the Scottish mining industry has helped to send the family interests of landowner the Duke of Buccleuch back into the red.
The Buccleuch Estates posted a £573,000 pre-tax loss for the year ended October 31, according to accounts filed with Companies House, as a miner using its land collapsed and the company put other energy schemes on hold.
Buccleuch had made £1.9m profit in its 2012 financial year, and a £1.5m profit in 2011. This had been a respite after the company racked up losses totalling £30m in the three years to October 2010 due to the property downturn.
Writing in Buccleuch Estates' accounts, the Duke said there had been "considerable progress" within the business, highlighting a post-tax profit of £31,000 for the latest financial year.
In a strategy developed two years ago Buccleuch has focused its interests on property, energy and hospitality and tourism.
However, the impact of shale gas exploitation in the United States, which has sent coal prices tumbling has been felt in the Buccleuch estates in Scotland.
The Duke said: "Energy markets remained volatile in 2013 and UK energy policy continues to be very unclear and ambiguous.
"Coal prices continued to fall due to cheap exports from the US and South America, in turn prompted by the rapid expansion of unconventional gas in the US, which has led many generators to convert to gas, leaving large volumes of US coal looking for export markets."
The consequence of this has been far reaching in the UK and for Scotland in particular; with both Scottish Resources Group and ATH Mining going into receivership in Scotland.
Buccleuch, whose non-executive directors including Tesco Bank chief executive Benny Higgins, estimated that this has left the country with £160 million of uninsured restoration liabilities "as well as devastated local economies which depend on these activities for employment".
Buccleuch's Queensberry Estate owned the site of Glenmuckloch coal mine whose operator ATH Resources went into administration at the end of 2012.
Buccleuch has formed a joint venture with Hargreaves Surface Mining to retrieve more coal from the site in Dumfries and Galloway, and restore it.
Selkirk-based Buccleuch said its plans to develop a coal mine on the Eskdale and Liddelsdale Estates in the Borders with Kier Mining remains at an exploratory stage "due to current coal pricing".
Similarly, its attempt to extract coalbed methane in partnership with Dart Energy have not progressed.
There have been worries about the impact of hydraulic fracking techniques on the local environment.
The Duke said: "We continue to work with community representatives and government, at local and national level, to address environmental concerns and, for the sake of clarity, until such time as those concerns have been addressed, it is not our intention to use hydraulic fracking.
"We remain convinced, however, that subject to further test drilling, this represents a significant economic development opportunity for Scotland."
Commercial property, the biggest single driver of profit for the group, was more positive.
The Duke said that confidence has begun to return to the property market.
This allowed Buccleuch to achieve better than targeted gains on its investment portfolio.
It disposed of a number of developments including the Evolution site on Glasgow's Oswald Street to German hotelier, Motel One.
On the tourism , side it said visitor numbers across its four estates were up during the year "but remain modest".
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article