Trading Statement

UK Coal PLC
18 July 2007

                                  UK COAL PLC

              Trading update for the six months ended 30 June 2007

                           Continued strong progress



UK COAL PLC ('UK COAL' or the 'Group') today provides the following trading
update in advance of the publication of its interim results for the half year
ended 30 June 2007, which will be announced on 5 September 2007.

Overall trading in the period since the update in April has been in line with
expectations. Further significant progress has been made in developing the
Group's property portfolio which has increased in value to £398.0 million at the
half year (2006 year end: £343.9 million). Good progress has also been made in
improving the operating performance of the mining business.

Group reported profit before taxation is expected to be around £40.0 million
(2006 restated: £19.8 million), including property revaluation gains of £51.0
million (2006 restated: £21.6 million).

The gross pension deficit is expected to reduce by £44.5 million in the period
to £50.0 million at 30 June 2007 due to improved bond yields, additional
contributions, good investment performance and the sale of Maltby. £35.6 million
of this reduction in deficit will be reported through reserves.

Key Performance indicators are summarised in Table 1.



Property

The property division managed by Harworth Estates is expected to record an
overall profit to 30 June 2007 of £53.5 million (2006 restated: £22.9 million).

The RICS valuation increased by 16% in the half year. The Company's internal
exercise estimating the portfolio land value in 2012 with the benefit of
anticipated planning consents, has grown to £900 million, a 12.5% increase since
the year end. During this period, an additional 11 sites were added to the
originally identified 60, giving a total pipeline of 71 projects covering a net
developable area of 3,326 acres providing land for an estimated 29m sq ft of
employment space along with 20,000 housing plots. We continue to identify
further opportunities, however, the additional acreage identified in the first
half should not be taken as an indication of the level of further opportunities
to be identified in the coming periods.

The Company has recently received planning consent on three sites: a housing
scheme of 80 units at Sharlston, West Yorkshire, an employment scheme of 500,000
sq ft at Chatterley Valley in Staffordshire and, after appeal, a further small
business park at Riccall, Selby, North Yorkshire.

Consent for 900 houses and 250,000 sq ft of employment use within Phase 1 of the
Prince of Wales scheme in Pontefract, along with schemes at five other locations
throughout the UK, is expected in the next quarter. We have progressed two
further significant planning applications at Lounge in the East Midlands
(900,000 sq ft to be submitted end of July) and at Coalville, South
Leicestershire (600,000 sq ft recently submitted) with our Joint Venture
partners Gazeley, Graftongate and Legal & General.



Deep Mines

Deep Mines returned to profit in the month of June. Excluding the issues at Daw
Mill announced in January, which led to a £20.0m profit shortfall to plan, all
mines have performed as expected. As a result, overall deep mining operating
losses for the half year amounted to £15.0 million (2006: £0.9 million loss).
Operating losses are calculated after exceptional gains of £12.0 million from
the sale of Maltby Colliery and £2.6 million redundancy and closure costs (2006:
£3.7 million).

Negotiations to secure further future coal supply contracts are well advanced.
We are confident any new supply agreements will reflect market prices adjusted
upwards for transport and other benefits of sourcing indigenously produced coal.
Coal prices at 30 June 2007 have increased by more than 15% compared to 31
December 2006.



Surface Mines

Surface Mines have performed well in the half year despite adverse weather
conditions, and the business continues to grow strongly. Output has increased to
700,000 tonnes (2006: 210,000 tonnes) and operating profit is expected to be
£4.5 million (2006: £1.2 million).

Planning consents have been received for a further three sites. The permitted
reserves base now stands at 4.9 million tonnes (June 2006: 4.1 million tonnes).



Power Generation

Harworth Power, UK COAL's power generation subsidiary now has 29 MWe of
installed capacity. Engines at the former Stillingfleet Mine have been fully
commissioned since May 2007. Operating Profit is expected to be £2.0 million
(2006: £1.6 million).

Planning applications for 9 wind turbines have been submitted or are in the
appeal process.



Financial

Finance costs were £5.0 million (2006: £5.0 million).

Net debt was £61.0 million at the end of June 2007 (December 2006: £51.8
million). This benefited from proceeds from the sale of Maltby Colliery of £21.5
million and temporarily low working capital levels at the period end.



Outlook

Overall the Group is well placed to continue the delivery of further value for
shareholders in the coming half year and beyond and will maintain its focus on
realising the significant potential within its property portfolio, improving the
operating performance of the mining business, and capitalising on opportunities
in power generation.


Table 1 - Key Performance Indicators (KPIs)                    H1           H1       Year
                                                             2007         2006       2006
Financial                                                Expected     Restated     Actual
Net Assets per Share  (£/share)                              2.06         1.28       1.56
Profit Before Taxation  (£ millions)                         40.0         19.8       17.6
Net Debt         (£ millions)                                61.0         59.9       51.8
Net Assets  (£ millions)                                    323.0        191.4      244.1

Property
RICS Valuation  (£ millions)                                  398          293        344
Estimate of land value in 2012  (£ millions)   (1)            900          800        800

Mining
Coal Sales Price  (£/GJ)                                     1.52         1.39       1.41
Contractual supply commitments  (million tonnes)             15.2         24.1       17.9
Price of contractual supply commitments  (£/GJ)  (2)         1.53         1.51       1.51
Period end comparative spot prices  (£/GJ)  (3)              1.84         1.58       1.62

Deep Mines
Output  (million tonnes)                                      3.3          5.3        8.9
Full Cost of Production Deep Mines  (£/GJ)                   1.87         1.41       1.56
Cash Cost of Production Deep Mines  (£/GJ)                   1.62         1.24       1.32

Surface Mines
Output (million tonnes)                                       0.7          0.2        0.6
Full Cost of Production  (£/GJ)                              1.29         1.55       1.93
Reserves with Planning (million tonnes)                       4.9          4.1        4.1
Reserves in Planning  (million tonnes)                        3.3          4.4        5.3
To be submitted for planning in 2007 (million                 4.9          5.9        4.6
tonnes)

Power Generation
MW Hours Generated  (thousand MWh)                             75           65        120
Wind turbines in Planning process                               9            9          9

(1)   Value in 2012 in money of the reporting period
(2)   Subject to the outturn of international coal prices
(3)   Including delivery premium. Source: Argus McCloskey coal price index report



Enquiries:

Media:

Citigate Dewe Rogerson                               Tel: [phone]
Anthony Carlisle                                     Mobile: [phone]
Laure Lagrange                                       Mobile: [phone]


Analysts and investors:

Chris Mawe                                            Mobile: [phone]
Group Finance Director, UK COAL PLC






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