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Thoresby Colliery

Good News from: UK Coal Plc
Monday, 10 December 2007

UK Coal PLC - Contract with EDF


Underpins £55 million investment at Thoresby Colliery to access 12 million tonnes of additional coal reserves

UK COAL PLC, the county's biggest producer of coal and the developer of one of Britain's largest brownfield property estates, today announces an important new contract to supply coal from its Thoresby Colliery in North Nottinghamshire to
power generator EDF Energy.

The contract enables UK COAL to commit to a £55 million investment programme at Thoresby, to access a further 12 million tonnes of reserves and extend the life of the colliery by around 10 years.

The contract with EDF Energy is for the delivery of four million tonnes of coal between 2009 and 2012 from Thoresby to EDF Energy's Nottinghamshire power stations, Cottam and West Burton. After 2012, UK COAL will continue production
at Thoresby for a further estimated six years, with the flexibility to agree new long term supply contracts, make 'spot sales,' or a combination of the two.

EDF Energy is a long standing core customer of UK COAL. Today's announcement follows last month's agreement with EDF Energy for the supply, over the next two years, of substantially all of the remaining planned production from UK COAL's
Welbeck Colliery, Nottinghamshire; and October's agreement for the supply of almost six million tonnes of coal to E.ON's Ratcliffe station, near Nottingham, over the next five years. Most of the E.ON coal will be supplied by UK COAL's
Daw Mill Colliery in the West Midlands.

Nearly all the coal will be supplied to the EDF Energy and E.ON power stations by rail.

Jon Lloyd, UK COAL Chief Executive, said:
'This is excellent news for all parties. For EDF Energy, it secures a continued guaranteed source of quality coal produced on the doorstep of its power stations. For UK COAL, it is a further significant advance towards us achieving market price for our coal production; it enables us to invest in profitably opening-up major new reserves at Thoresby, and it thereby extends the life of the mine and the jobs of its employees for 10 years longer than had until now been planned.'

Guy Buckenham, EDF Energy's Managing Director, Wholesale Markets, said:

'Cottam and West Burton power stations have a key role to play in meeting the needs of our customers. We are delighted that this coal supply agreement with UK COAL ensures that a significant proportion of our coal requirements will continue to be met by coal produced and supplied by local collieries.'

UK COAL is also planning market priced 'spot sales' for coal produced across its portfolio of deep and surface mines. The delivered cost of internationally traded coal has almost doubled over the last 12 months.


Thoresby Colliery: Thoresby Colliery dates back to 1925 and has traditionally been one of the most efficient and productive mines in the British coalfields. Employing 500 people, Thoresby's current working area involves extracting reserves in the Parkgate seam. These reserves were originally assigned to the neighbouring Ollerton Colliery, which closed in 1994, and are some 13 kilometres from the Thoresby shafts. Those reserves will be exhausted by late 2009.

The new EDF Energy contract enables UK COAL to commit to an investment programme of circa £55 million over the next four years, giving access to around 12 million tonnes of additional coal reserves in the Deep Soft seam close to the Thoresby pit bottom. Production from the new reserves is planned to commence in late 2009 and continue until around 2108.

Eleven coal faces are planned - each between 265 metres and 350 metres wide - in the shadow of the successfully worked Top Hard seam which is some 180 metres above, and over the footprint of the Parkgate seam some 37 metres below, thus
best seeking to avoid known geological faulting or bad ground.

UK COAL: A mining, property and power company employing 3,100 people, UK COAL has its headquarters at Harworth Park, Harworth, near Doncaster, South Yorkshire.

Britain's biggest producer of coal, UK COAL operates four deep mines in the Midlands and Yorkshire, and four surface mines in the North East, the North West, and the Midlands. Over 90% of UK COAL's annual output of almost nine
million tonnes is sold to generate around 5% of Britain's electricity requirements.

The property division, managed by Harworth Estates, owns around 47,500 acres of land and other property. As at the end of June, 2007, with a RICS valuation of £398m, the Company estimates the portfolio land value in 2012 with the benefit of planning consents to be £900m. Over 70 sites, covering an area of over 3,300 acres have been identified for development, creating opportunities for building around 20,000 homes and 29 million square feet of employment space over the
next six years.

The power business, Harworth Power, includes the generation of electricity using engines to burn methane extracted from collieries for safety reasons, and the development of wind farms on 10 or more sites, mainly in the North East and the

  This information is provided by RNS
            The company news service from the London Stock Exchange

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