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Powerfuel goes into administration

Company has called in KPMG to act as administrator

British energy group Powerfuel, which was building one of UK's biggest clean coal projects at Hatfield colliery in Yorkshire, collapsed into administration.

The company, which was started by mining entrepreneur Richard Budge and partly owned by Russian mining company KRU, has called in KPMG to act as administrator.

According to Richard Fleming, KPMG joint administrator and UK head of restructuring, Budge's 48 per cent stock in Powerfuel will now be "valueless."

"The substantial funding gap has not been addressed in the past 12 months and accordingly the project has stalled," said Fleming to the Times, commenting on the £635m cash shortfall that the company is facing for the construction of the coal-fired power station.

Fleming added that his priority would to find a buyer for the Yorkshire project and the company's prime subsidiaries.

"The work being undertaken by Powerfuel to develop one of the world's first CCS projects is ground breaking. We very much hope that a new owner will be found," said a spokesperson for the Government