Harworth Gp Regulatory News (HWG)

UK COAL PLC ("UK Coal" or the "Group")

Trading update for the six months ended 25 June 2011

UK COAL today issues a trading update, before the publication of its Interim Results for the six months ended 25 June 2011, on 23 August. 

Production

Total first half production was 4.1m tonnes (H1 2010: 2.7m tonnes, FY 2010: 7.2m tonnes). Deep mine production in the half was 3.1m tonnes, in line with management expectations (H1 2010: 2.2m tonnes, FY 2010: 5.8m tonnes).

Surface mine production was 1.0m tonnes (H1 2010: 0.5m tonnes, FY 2010: 1.4m tonnes), slightly ahead of management expectations with better than expected weather conditions assisting operations.

Average realised sales price

Our average realised selling price in the first half of 2011 was £2.36/GJ (H1 2010: £1.97/GJ, FY 2010: £1.97/GJ). This increase reflects the stronger market price for coal prevailing throughout the period together with a reduction in deliveries under older legacy contracts.

Debt

Net debt continued to reduce and, at 25 June 2011, was £207m (December 2010: £242m), excluding restricted cash. Property disposals have generated around £37m of receipts in the period. Generator loans/prepayments included in the net debt figures above were £97m (December 2010 £101m).Strategic Recovery Plan

As announced at the AGM in June, UK COAL implemented its Strategic Recovery Plan at the end of May. The workstreams relating to all key drivers of performance for the Group are underway and on track.

Daw Mill Colliery

In the preliminary statement of 2010 results on 19 April, we referred to the risk of a face gap again this year at Daw Mill as a consequence of last year's operational issues. UK COAL has followed a twin-track strategy to reduce this risk. The current panel, 32s, has been reconfigured and production extended, although at reduced rates, to finish at the end of 2011. Equipment for the new panel, 303s, is currently being installed and this face is forecast to be available for production by late August, at which point both faces will be operating. This approach reduces the risk of a face gap, and avoids any change in the Group's expected production levels for the year.

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Enquiries:

Analysts and investors

Jonson Cox Chairman Tel: 01302 755 002

David Brocksom Group Finance Director Tel: 01302 755 002

Media

Rupert Pittman Cardew Group Tel: 020 7930 0777

Emma Crawshaw