Giving Budge a bear hug

Mikhail Abyzov, boss of Russia's second largest coal company Kuzbassrazrezugl, has pre-empted Richard Budge's plan for a stock market comeback by buying his Powerfuel vehicle.

Kuzbassrazrezugl’s move is part of a £1 billion investment drive in Britain, to make Abyzov the UK’s new King Coal.

Budge, whose former RB Mining company took over many of the privatised UK coal pits, had lined up a £35 million AIM placing for Powerfuel to fund the reopening of Yorkshire’s Hatfield colliery, acquired by him a few years previously. Broker Collins Stewart had secured backing from the likes of Phillip Richards’ RAB Capital.

Then the Russians moved in, buying 51 per cent of Powerfuel, mostly from Budge. Kuzbassrazrezugl has adopted the company’s plan to reopen Hatfield next year, with a licence to build a coal-fired power station next door.

Abyzov says the mine should be able to reach production of two-to-2.5 million tonnes by 2010. Budge has made a profitable exit and Britain has a new Coal Czar.

Robert Tyerman

Robert Tyerman was news editor of 'Growth Company Investor'.

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