UK coal issues profits warning

The recovery of the UK’s biggest coal producer was dealt a blow today after it revealed it would make a loss in the current financial year.

UK Coal, which supplies 7% of the country’s electricity generation needs, said production problems reported in September had lasted longer than expected and caused output in the second half of the year to fall below expectations.

Last month, the company posted half-year profits of £7m (€10.4m), compared with losses of £30.5m (€45.2m) for the same period a year earlier.

UK Coal warned previously that the second half of the year would be tough, following production gaps at its Welbeck and Thoresby collieries in Nottinghamshire, difficult mining conditions at Maltby, Yorkshire, and disruption at Daw Mill near Coventry following two accidents.

The other operational deep mine is at Kellingley in Yorkshire.

The disruption continued through most of September, while the performance at Maltby has still to return to normal levels, UK Coal said today.

The company said lost production amounted to around 422,000 tonnes, which at market rates is estimated to be worth £15m (€22.2) and £20m (€29.6m).

Total output for the second half is now expected to be between 3.9 million and 4.1 million tonnes, rather than the 4.5 million forecast in September.