AGM Statement

UK Coal PLC
21 May 2002



                                                                     21 May 2002

                                      UK COAL PLC
                                     AGM STATEMENT


The Chairman of UK Coal made the following statement at the AGM held today.


Sales volumes in the first four months of 2002 were 6.7 million tonnes (2001:
7.0 million tonnes). Coal stocks increased in the period by 0.6 million tonnes
(2001: reduction by 0.8 million tonnes).


Deep mine production in the period was 5.9 million tonnes (2001: 4.7 million
tonnes) benefiting from improved performances at Daw Mill, Rossington and
Thoresby, and from Ellington being in full production throughout the period.


The new longwall coalface at Daw Mill Colliery commenced production in April and
is now building to full production in a 5-meter section of the Warwickshire
Thick coal seam.  The size and configuration of the equipment in use is a first
for the Company and amongst the largest worldwide.  In consequence,
commissioning and build up will take longer than more traditional coalfaces. The
initial start up on the face has been successful with outputs around 14,000
tonnes per week.  The programme to ramp up production is now ongoing and will
take several weeks due to the complexity of the new systems.  Full production
rates should be achievable by July.

In January the Company announced the closure of the Prince of Wales Colliery,
which is programmed to end production in August.  Redundancy costs associated
with the closure will be included in the interim results.  Redundancy costs to
date are £3 million.  The total cost will depend on the number of employees to
whom we are able to offer employment to at other collieries, but is likely to be
in the range of £9 to £12 million.


The Company announced in April that it was undertaking a review of the mining
prospects in the Selby complex.  That review is drawing to a close and the
Company expects to announce its conclusion in June.


The unions representing the mining supervisors have rejected the annual wage
increase accepted by 85% of employees and are currently balloting for selective
industrial action in support of an enhanced offer.  The ballot result will be
known in early June.


After the initial research and analysis stage Project 105 is now four months
into the implementation plan and is already showing positive effects.  The
Company is focused on achieving the target of 105p p/gj by the end of 2003.


Surface mines produced 1.4 million tonnes (2001: 1.3 million tonnes) despite
operations suffering from persistent rainfall in the early part of the year.
Planning approval for 2.6 million tonnes was gained, and two new sites commenced
in April.


The Property and Estates business has made further progress with outline
planning approvals being received for 100 acres for the development of 1.53
million sq ft of business space at Waverly, near junction 33 of the M1.   A
joint venture has been formed with Yorkshire Forward for the development of an
Advanced Manufacturing Business Park on the site.


The market for coal in the UK remains very competitive and coal burn volumes are
expected to fall back from the high levels of 2001.  In the first half of 2002
incremental sales are being constrained by customers' stock overhang. In the
second half of the year progress on new sales is anticipated by displacing
imports and at prices competitive with world market prices. The sharp fall in
electricity prices in the UK, coupled with fluctuations in gas prices and the
on-going effect of NETA, has increased competition between power producers and
volatility within the market for coal.  Coal consumption indicators for the
early months of 2002 show that coal burn is holding up better than market
forecasts and steam coal import levels have reduced by 23% compared to the same
period last year.


The Company's drive to improve productivity and reduce costs continues to make
good progress, some of this being demonstrated by the increased deep mine
production in the first four months of the year.  The focus of management
attention is on the continued improvements in unit costs to create a long-term
business which is competitive with imports in our home market.


Enquiries:

UK COAL PLC
Gordon McPhie, Chief Executive                            01302 751 751

Gavin Anderson & Co
Financial:
Liz Morley/Fiona Grant Duff                               020 7554 1400

Operational:
Stuart Oliver                                             01525 381 759



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