UK Coal in £7m land sale to cut debt pile

BRITAIN'S biggest coal miner UK Coal has sold a parcel of farm land for £7m in cash as it tries to tackle its mammoth debt burden.

The Doncaster-based group, which owns three deep mines, is in talks to sell more land to bring down net debt from 265m at the end of September.

UK Coal has exchanged contracts to sell about 1,355 acres of land in Derbyshire, Nottinghamshire and Staffordshire, together with buildings, to HW Martin, a Derbyshire-based private company.

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UK Coal said it has the right to a further unspecified sum of money if any development happens on the land in future. The group also retains the right to mine any potential coal from the land in future.

The miner added the farm land was worth 6.4m a year ago and generated rent income of just 0.1m in 2009.

The disposal is part of UK Coal's plan to sell around 8,000 acres of surplus agricultural land from its 30,000-acre portfolio of farming land. It expects to recoup 24m from land sales before the end of the year, with the latest deal taking land sales to 11m so far. Previous smaller sales have been dotted across the Midlands, the North and Scotland.

News of the land sale comes a day after UK Coal downgraded its deep mine production target for 2010 by up to 200,000 tonnes.

The group had to suspend mining at Kellingley deep mine in West Yorkshire after a methane leak caused an underground fire.

Shares in the group yesterday were unchanged at 37.75p.