UK Coal’s recovery plans on track

Under the leadership of new executive chairman Jonson Cox, the former managing director of Yorkshire Water, UK Coal has prioritised overhauling its mining performance and cutting debt.

Earlier this year, Mr Cox, who replaced chief executive Jon Lloyd, pledged to “get back to economic health where a return is made on each tonne of coal produced rather than a loss”.

Doncaster-based UK Coal has issued a trading update, before the publication of its interim results for the six months ended June 25 2011, on August 23.

The update reveals that total first half production was 4.1m tonnes, an increase on the 2.7m tonnes recorded in the same period the year before.

Deep mine production in the half was 3.1m tonnes, which was in line with management expectations.

Surface mine production was 1.0m tonnes, which was slightly ahead of management expectations with better than expected weather providing a boost for operations.

Net debt continued to reduce and, on June 25 2011, was £207m, excluding restricted cash. Property disposals have generated around £37m of receipts in the period.

The statement added: “As announced at the AGM in June, UK Coal implemented its strategic recovery plan at the end of May. The workstreams relating to all key drivers of performance for the group are underway and on track.”

Earlier this year, UK Coal owned up to “deep-rooted” problems and three years of “unacceptable performance” as it reported pre-tax losses of £124.6m for 2010, bringing cumulative losses over the past three years to £269.3m.