UK Coal drives production on new seams

UK COAL yesterday told investors that production was "living up to expectations" after it began operating new seams at two of Britain's biggest collieries.

The company said half-year volumes at Kellingley in Yorkshire were twice the level seen a year earlier, with output at Thoresby in Nottinghamshire up 50 per cent following recent investment.

While Doncaster-based UK Coal is on track to produce 7.6 million of coal this year, the cost of moving to more viable seams left its mark on half-year results.

First-quarter production was sharply lower due to transition work and meant interim losses widened to 93.2 million from 81.5m a year earlier. Net debt leapt to 170.1m from 114.3m.

Shares jumped 5.3 per cent to 40p as investors welcomed the production update.