Return to profit won’t halt UK Coal closure

BRITAIN’S biggest coal producer yesterday said talks about closing one of the country’s largest mines were ongoing despite its first annual profit in four years.

UK Coal, which employs about 2,500, hailed its recovery plan as it reported pre-tax profits of £58 million for 2011, compared to a £124.6m loss the previous year.

The South Yorkshire-based group, which operates three deep mines and six surface mines, said it benefited from a 25 per cent rise in coal prices and a 4 per cent increase in production.

But the firm is still considering closing its Daw Mill mine near Coventry, which employs some 800, by early 2014 when current coal panels will have been exhausted.

Louise Collinge, an analyst at Investec, said the uncertainty around UK Coal’s restructuring plans overshadowed the good set of full-year results.

She said: “We [withdrew] our recommendation and target price for UK Coal, due to the uncertain outlook for the company. This remains the case.”

The group, which bought the English assets of British Coal in 1994 when the state-owned business was privatised, reported a 40 per cent surge in revenues to £488.2m as it produced 7.5 million tonnes of coal, up from 7.2 million in 2010.

The group also owns about 30,000 acres of land.