UK Coal resumes mining at colliery

UK Coal said it has resumed mining at Kellingley and has now sold £23.3m of surplus farm land as it continues to whittle away at its huge debt pile.

The Doncaster-based group, Britain's biggest coal miner, yesterday said it has sold another 2,218 acres for 6m, taking it close to its target of recouping 24m from land sales by the end of the year. The land in Durham and Northumberland was sold to a private buyer.

The group was last month forced to downgrade its deep mine production target for 2010 by up to 200,000 tonnes and suspend mining at Kellingley deep mine in West Yorkshire when a methane leak caused an underground fire.

UK Coal yesterday said it resumed production at Kellingley ahead of forecast on December 9, and the mine has this week produced coal at near-to-normal levels. The group said it plans to mitigate the shortfall by continuing mining and dispatching coal at its deep mines through most of Christmas. Shares dipped 0.7 per cent to 37.5p.

The latest land sale comes days after it sold another 1,355 acres of land for 7m. UK Coal said it has the right to a further unspecified sum of money if any development happens on the land in future and it retains the right to mine any potential coal from the land.

It added the land was worth 7.4m at the end of 2009, and generated rent of just 0.1m last year. It will use the cash to pay down net debt which stood at 265m at the end of September.