UK Coal 'cautiously optimistic' for full year

After a tough first six months of the year, dogged by production issues, old contracts, safety concerns and the recession, the Doncaster-based group said it has has a strong third quarter.

UK said it is on track to mine around 6m tonnes of coal from its deep mines this year. These are Daw Mill in the West Midlands, Thoresby in Nottinghamshire and Kellingley, near Knottingley, in West Yorkshire.

It also expects to produce around 1.5m tonnes of coal from its surface mines.

"Overall, with the third quarter showing a small operating profit, mining output starting to show more consistent performance, and our asset sales on track, we remain cautiously optimistic about the remainder of 2010 and 2011," said the group in a statement.

Excluding its now-closed mine at Welbeck, third quarter deep mine production of 1.7m tonnes was up over 40 per cent on the same period last year and year-to-date output was 3.7m tonnes, in line with 2009.

UK Coal said work has now started on its new Huntington Lane surface mine near Telford, following planning delays. It said mining will depend on the weather over the next few weeks.

The group's property division continues to make good planning progress, it said. It has won approval for 150 homes at Ball Hill, South Normanton. Its major planning application at Harworth, North Nottinghamshire, for almost 1,000 homes, a 2,044 sqm food store and 76,500 sqm of new industrial space is expected to be determined in December.

It is also making progress selling 8,000 acres of surplus agricultural land and has accepted offers for more than 5,000 acres, which should raise 24m before the end of the year.

Overall net debt was approximately 265m at the end of September, up from 225m a year ago. It hopes a positive operating profit and land sales will reduce overall debt by the end of the year.