Harworth Gp Regulatory News (HWG)

17 Nov 2009 13:47



17 November 2009

UK COAL PLC

("UK COAL" or "the Company")

Production Update

In its Interim Management Statement of 26 October 2009, UK COAL estimated that deep mine production for the full year would be around 6.2 million tonnes and that surface mine production would be around 1.4 million tonnes. 

Surface Mine production remains in line with previous expectations at around 1.4 million tonnes. However, for reasons unconnected with the matters reported in the Company's 26 October 2009 statement apart from at Kellingley, production over the past three weeks at each of the Company's deep mines has been materially lower than anticipated.

Despite deploying increased man hours and taking other mitigating actions, the Company therefore believes that deep mine production for the year ending 26 December 2009 is now likely to be between 5.7 and 5.8 million tonnes.

At Kellingley, the required work has been completed on the face equipment following the recent tragic fatality, and face production has restarted on the schedule anticipated in the 26 October 2009 statement. However, the speed of recovery towards a normalised level of production has been slower than originally anticipated, and as a result, the Company has therefore revised down estimated production by a further 100,000 to 150,000 tonnes, making a total impact of 300,000 to 350,000 tonnes from the tragedy. For the full year, Kellingley is now expected to produce around 1.0 million tonnes. Investigations are still continuing into the cause of the fatality. 

Production at Thoresby continues to be affected by the previously reported very poor environmental and geological conditions on its last old panel and has not seen the improved output rates expected at the time of the 26 October 2009 announcement. In recent weeks, we have been mining through a seam-split as expected. However, progress through this band has been slower than anticipated - in particular, readings from dust-monitoring equipment on the face has required the Company to reduce the daily man-hours worked on the face. We continue to mine through this seam-split, although at a slower rate than originally anticipated, and this slower mining rate is expected to continue for most of the rest of the year. The production estimate for Thoresby for the year has, therefore, been reduced by 150,000 tonnes to around 800,000 tonnes.

Daw Mill is still expected to mine all the remaining coal in the current panel prior to Christmas and achieve production of 3 million tonnes for the full year. The last part of the current panel is being affected by a larger dirt band than originally anticipated, which will require additional washing and grading and, as a consequence, some reduction in saleable production.

At Welbeck, production has been affected by geological effects on the face. While these have now been substantially worked through, this slow production has reduced our production expectations for this mine. In consequence, Welbeck's production is now expected to be around 1.0 million tonnes for the year against the previous forecast of nearer 1.1 million tonnes. 

The development work and preparation of the new faces at Daw Mill, Kellingley and Thoresby continue to progress well and remain on target to be ready, as previously announced, in January 2010 for Daw Mill and Kellingley, and in March 2010 for Thoresby.

Board Director of Mining Update

The search for a Board Director of Mining is progressing. We expect to be able to make an appointment in the new year. 

Enquiries:

Media:

Citigate Dewe Rogerson Tel: 020 7638 9571

Anthony Carlisle Mobile: 07973 611 888

Analysts and investors:

UK COAL PLC 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