Harworth Gp Regulatory News (HWG)

UK COAL plc ("UK COAL" or "the Group")

Board and Governance Structure Changes

In recent years, UK COAL has developed two distinct principal businesses, coal mining from deep and surface mine sites, and property, creating value from our very large brownfield land estate.

The very different characteristics and management requirements of these activities are clear, and the board believes that shareholders' interests would be best served by ensuring that each business can focus on their own challenges and opportunities with a minimum of distraction.

In the last quarter of 2009 and the first quarter of 2010, production difficulties at our deep mines dominated the Group's affairs. The planned transition of our deep mine business, however, has now been achieved. We have three deep mines benefiting from the substantial investments made in opening the new seams at Kellingley and Thoresby and the face change at Daw Mill. Our recent trading statement illustrates the performance these mines are now able to achieve. In addition, the legacy contracts, which have so constrained UK COAL over many years, will be substantially completed in 2011, and the positive impact of our new long-term supply agreements is becoming increasingly apparent.

In property, following significant planning progress in recent years, the focus is expected to move towards development schemes.

In these circumstances, the board believes it is right to modify the Group's management structure so that the mining and the property businesses take more responsibility for their own activities, led by Managing Directors. Accordingly, as of August 1, 2010, Mr Gareth Williams, currently Group Mining Director, will become Managing Director of the Mining Division, and Mr Owen Michaelson, currently a Non-Executive Director and representative of Peel Holdings, will leave his employment with Peel Holdings (although he will continue to have a non-executive directorship within the Peel Holdings group) to become full time Managing Director of the Property Division. Both divisional Managing Directors will sit on the board of the Group.

Given this approach and at this stage of the company's development, instead of the Group being led by a Non-Executive Chairman and a Group Chief Executive, it is intended that an Executive Chairman take responsibility for leading UK COAL. The Executive Chairman would have overall leadership and would be accountable for the Group Managing Directors, whilst being supported by a central team under Mr David Brocksom, Group Finance Director. At this stage in the company's development, it is anticipated that the Chairmanship will be a substantively full-time appointment, although it is intended that it should revert to a part-time role over time.

A search is being instituted for an appropriate individual for the Executive Chairman role. Until this person is identified, Mr David Jones and Mr Jon Lloyd will continue, respectively, as Chairman and Chief Executive. Mr Lloyd has also agreed that he will continue with the Group for a limited period thereafter to facilitate an orderly transition.

Mr Steven Underwood, Corporate Development Director of Peel Holdings, will, as of August 1, 2010, join the UK COAL board as Peel Holdings' representative non-executive director upon Mr Michaelson leaving the Peel Holdings group to become UK COAL's Managing Director of the Property Division. No other changes are proposed to the board.

David Jones, Chairman of UK COAL, said:

"We have now completed the transition of our deep mining business to three mines, and our recent trading statement shows the sharp improvements in their operating performance, as well as pointing to the benefits still to come from our new supply agreements. In parallel, our property business has demonstrated the substantial value it can realise and, over the coming years, will be moving into its development phase. These very different businesses need to focus single-mindedly on their distinct value creation strategies.

"In the light of this, and as we continue to manage out from a challenging situation, we believe that the best way to ensure the single-minded focus on each business and the range of issues they will face is for each business to be led by its own Managing Director, each reporting directly to the board. We therefore believe it is appropriate that the Group should now be led by an Executive Chairman, rather than a Non-Executive Chairman and Group Chief Executive.

"The board and I want to pay tribute to Jon Lloyd's considerable achievements, and we welcome his support in transitioning to the new structure. We also know we have the right individuals in Gareth Williams and Owen Michaelson to lead our mining and property divisions.

"For me, it has been a privilege to serve as Non-Executive Chairman for over seven years, but I have no wish to change my role to that of Executive Chairman. Accordingly, we are commissioning a search and, once the right person has been appointed, I intend to step down."

Listing Rule 9.6 disclosure

Mr Steven Underwood is the Corporate Development Director of the Peel Holdings group of companies, which, through its subsidiary Goodweather Holdings Limited, is a 28.3 per cent. shareholder in the Group. He is also currently a non-executive director of Pinewood Shepperton plc. He holds a beneficial interest in 1,652 ordinary shares of £0.01 each in the capital of UK COAL.

There are no other matters in connection with the appointment of Mr Underwood to be disclosed under paragraph LR 9.6.13 R of the Listing Rules of the UK Listing Authority.

Enquiries:

Media:

Citigate Dewe Rogerson Tel: 020 7638 9571

Anthony Carlisle Mobile: 07973 611 888

Analysts and investors:

UK COAL Tel: 01302 751751

Jon Lloyd, Chief Executive

David Brocksom, Finance Director

Citigate Dewe Rogerson Tel: 020 7638 9571

Nick Cox-Johnson Mobile: 07957 596 729