UK Coal says talks continue

In a trading update Doncaster-based UK Coal said talks were still at an early stage and there is no certainty that a transaction will result.

The company said production in the first quarter of 2010 was 1.0 million tonnes, down from 1.7 million tonnes in the first quarter of 2009.

Of this 0.8 million tonnes was from deep mines and 0.2 million tonnes was from surface mines.

The first quarter has been hit by the delayed start to the new face at Daw Mill, along with lower performance from Kellingley and Thoresby, as they mined the last of the coal through poor geology in their old seams.

Daw Mill started the ramp up of its new face on April 25, and is continuing to ramp up production.

Kellingley and Thoresby have now finished the ramp up in their new faces and are both producing in line with expectations.

Welbeck mined the last of its coal on May 11 and is now starting the closure process.

Surface mine production at the start of the year was affected by the weather, although production is now recovering with the improvement in conditions.