The company has been criticised by the Tax Justice Network
The company planning to open a controverisal coal mine in Cumbria is ultimately controlled by a company registered in the Cayman Islands.
West Cumbria Mining Limited was given planning permission on Tuesday to open the first new deep coal mine in the UK for 30 years.
Cumbria County Council – which contains Conservative, Labour, Lib Dem and independent councillors – voted in favour of granting the underwater mine planning permission.
The decision was criticised by environmentalists like Green MP Caroline Lucas and Greenpeace who called it “appalling”.
In its latest accounts, West Cumbria Mining Limited says its principal activity is “developing metallurgical coal projects in the UK” and it is registered in England and Wales.
West Cumbria Mining Limited says it is 100% owned by West Cumbria Mining (Holdings) Limited.
West Cumbria Mining (Holdings) Limited is 82% owned by EMR Capital Investment Limited (No. 3B PTE Ltd) – which is registered in Singapore.
The ultimate parent entity of EMR Capital Investment Limited (No. 3B PTE Ltd) is EMR Capital Resources Fund 1, LP – which is registered in the Cayman Islands.
The chief executive of the Tax Justice Network Alex Cobham said:
“We campaign for the identification of the ultimate beneficial owners of companies, trusts and foundations because anonymity creates a series of threats. In the case of public contracts and permissions such as this one, the risks are all the greater.”
“First, a structure like this, running through a series of financial secrecy jurisdictions creates tax risk – in this case for the UK. It makes it significantly easier for a company to shift profits away, and to hide capital gains, so that a fair contribution may not be made in the place of operation – despite the company benefiting from the infrastructure, rule of law, educated workforce, natural resources and so on.”
“Second, this structure creates the risk that liabilities will not be met. Imagine, for example, that the mining operation goes ahead and is later demonstrated to have caused major environmental damage: who will the council pursue to ensure that those costs are covered by the people who took the private benefits? There’s a clear possibility that secretive offshore ownership allows not only the dodging of taxes due during the good times, but can also leave the public with any bill for the bad times.”
“Lastly, in this case, anonymous ownership poses a threat to governance. We’ve seen time and again how offshore secrecy has allowed politicians and public officials in countries around the world to hide the fact that they have a financial stake in a project for which they are making policy decisions. Given that this case has seen local councillors unexpectedly back a project with the potential to cause grave damage, it is surely incumbent on the council to provide complete transparency about the ownership.”
“In this specific case, it seems likely that the ultimate owners are the Australian private equity firm EMR Capital – but that is all the more reason why the full ownership chain should be made public, assuming there is nothing to hide.”
In response, WCM’s CEO Mark Kirkbride said:
‘WCM will pay all royalties due under the terms of our coal licences to The Coal Authority. WCM will pay all business rates applicable and ensure competitive salaries, pay and benefits to all employees and will ensure that all UK taxes are paid in full. WCM fully subscribes and meets the UK living wage policy. There will be no tax avoidance or evasion.”
“Furthermore, WCM has a legally binding requirement, imposed by the planning process and Cumbria County Council, to implement a restoration bond for the lifetime of the project so that there are no risks in terms of liabilities to the public purse.”
“Any suggestion that WCM is not governed correctly are strongly refuted, with strict compliance to all UK requirements and director responsibilities. There is nothing to hide at all.”
A WCM spokesperson added: “WCM is a UK registered private company. We have a series of shareholders, with a major shareholder being EMR Capital. EMR are a mining focussed private equity fund based in Australia. They have various subsidiary companies – there is no significance whatsoever to our project that there is a Cayman Islands subsidiary.”
There is no suggestion that WCM is breaking any regulations.
Joe Lo is a freelance journalist and a reporter for Left Foot Forward
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5 Responses to “Revealed: Planned Cumbria coal mine ultimately owned in Cayman Islands”
That sounds like LFF were threatened with being sued if they did not publish the company line! I could not find any reference to mining or even mining services in the Cayman Islands. I wonder what EMR do there!
Attempted smokescreen from the CEO. EMR manages funds on behalf of investors but there is no fund register accessible to the public to find out if there was one investor or thousands who subscribed. Neither does there seem to have been a prospectus to raise the £14.7m in 2014, just a punt from some Aussies pushing unacceptable UCG developments. Very brave of a company only founded in 2011 to risk c£15m of is own money on such a speculative venture. So brave I don’t think it at all likely, so whose money is it?
Dr Timothy Norris
There is a concern that coal will initially be extracted from the Cumbrian coal mines, leaving empty exhausted coal mines, and then radioactive fragments from decommissioning the Calder Hall reactor and the Thorp apparatus at Sellafield will be mixed with cement to provide a composite that will be injected into the exhausted coal mines to fill voids where coal has been extracted. Maybe this is safer than having a lot of highly dangerous radioactive material on the surface at Sellafield. Problem is that such disposal of nuclear waste will be unrectifiable if the cement encapsulation is insufficient and radioactive contamination leaks. The whole of the East coast of Ireland and the West coast of Scotland could be permanently ruined. I hope these nuclear bods know what they are doing ! Previous experience does not build confidence !
Left Brain Backward
This article and the associated comments are very poorly researched and betray a complete lack of understanding of how businesses, and particularly private equity firms, function.
The ultimate beneficial owners in companies like these are generally retirement funds, safeguarding the long-term livelihoods of public workers (teachers and the like) in places like Oregon, San Francisco and Tennessee (in the case of EMR).