Trading Statement

UK Coal PLC
29 November 2004


Trading Update

Since the appointment of Gerry Spindler as Chief Executive of UK COAL on the
18th October 2004, management has conducted a review of the business. As part of
long standing commitments, meetings will take place with investors and analysts
in the week commencing 29th November. Ahead of this and in accordance with best
practice, UK COAL is issuing the following trading update.

Performance 4 months July to October 2004


Sales

Sales volumes in the 4 months to the end of October were 4.4 million tonnes
(2003: 5.7 million tonnes). Unit income was £1.19 per gigajoule (2003: £1.08 per
gigajoule), reflecting long-term contract prices.

Production

Output in the 4 month period was 4.4 million tonnes (2003: 5.0 million tonnes)
with Selby producing 0.6 million tonnes (2003: 0.9 million tonnes).

Production from the ongoing deep mines in the four months was 3.2 million tonnes
(2003: 3.2 million tonnes).

Surface mines produced 0.6 million tonnes (2003: 0.9 million tonnes).

Production in the four-month period included output from increases in machine
available time through new shift patterns and extended weekend coaling as well
as an extension to coaling at the Selby complex. Total mining unit costs were
£1.32 per gigajoule (2003: £1.27 per gigajoule).


Surface Mining

On 18th December 2003, UK COAL acquired certain of the assets and liabilities of
Crouch Mining Ltd, a third party surface mining contractor operating on a UK
COAL owned site at Stobswood in the North East of England to complete coaling
and carry out land restoration work.

As part of the transaction, UK COAL assumed additional liabilities in respect of
land restoration on three sites with total estimated costs of £4.1 million which
were provided for. This represented the difference between the costs of work to
be undertaken by Crouch mining limited and UK COAL's estimate of the costs.

Planning permission has recently been rejected to extend coaling operations at
the Stobswood site, which if upheld on appeal will result in the restoration
work to be performed being both larger and more onerous than originally
envisaged.

To cover these and other additional costs, which will be incurred over a 5-year
period, UK COAL will be making a further provision for the remedial works in its
2004 accounts of up to £11 million on the assumption that planning permission
will not be granted.

With surface mine planning becoming increasingly difficult in England, UK COAL
has identified plant which will become underutilised in 2005. If this cannot be
put to economic use, an additional write down will be made at the year-end with
a charge to the profit and loss account of around £5 million. This will not have
a cash flow effect.

The planning environment for surface mines is expected to remain difficult. UK
COAL are lobbying intensively on this issue to enable the business to continue
to develop, particularly regenerating severely blighted Brownfield sites into
viable mining propositions with subsequent land development opportunities.

2005

Mining Operations

The deep mining operations have underperformed in the first 10 months of 2004.
The new Chief Executive has already implemented plans to address the performance
problems. These include project cost management and new maintenance programmes
which should improve the efficiency and effectiveness of the equipment. These
actions along with sound operational management should bring benefits in the
coming year and beyond. However costs in 2005, will increase due to higher
energy, steel and pension charges.

As announced in 2003, geological faulting at Welbeck and Rossington collieries
has resulted in revised mining plans which have affected 2004 and will continue
into 2005. These collieries will operate advancing long wall mining techniques
rather than the preferred lower cost retreat mining. These mining techniques are
unavoidable if the operations are to continue and will be employed whilst
investing in development of the next coalfaces to be worked in 2006.

Property

UK COAL has a significant property portfolio and will develop this over the
coming years. James Shaw has recently been appointed to the executive team and
will be leading development of strategy in this area. James has over 35 years
experience in property development and investment ventures including 10 years as
property director of Associated British Ports between 1991 and 2001 where he was
responsible for the re-development of Cardiff Bay and the regeneration of some
800 acres at Barry.

Outlook

Operating performance in recent weeks has improved. Gerry Spindler, the new
Chief Executive has already made a significant positive impact on the business
and the benefits of sound operational management are expected to continue. UK
COAL is reviewing the viability of under performing collieries and is engaged in
action to improve operational effectiveness.

Overall we are disappointed with the mining performance of the company in 2004.
We will take action to address the underlying problems in 2005 by resolving long
standing issues and by appropriate investment in collieries. This will allow the
company to realise its full potential by returning it to profitability in 2006
and beyond.


For Further Information:

Financial
Gavin Anderson & Company                          0207 554 1400
Ken Cronin                                        07887 591 499
Michael Turner

Operational
Stuart Oliver                                     01525 381 759





Saleable Output 2003 & 2004
-----------------------------
      
                     4 months          4 months        Cum to         Cum to
                     To Oct 04         To Oct 03       Oct-04         Oct-03
                     Mt                Mt              Mt             Mt
                   ---------          ---------       ---------      --------
Daw Mill               0.9                0.7             2.3           1.7
----------         ---------          ---------       ---------      --------
Ellington              0.2                0.2             0.5           0.6
----------         ---------          ---------       ---------      --------
Harworth               0.3                0.4             0.9           0.9
----------         ---------          ---------       ---------      --------
Kellingley             0.3                0.5             0.6           1.4
----------         ---------          ---------       ---------      --------
Maltby                 0.6                0.3             1.0           1.1
----------         ---------          ---------       ---------      --------
Rossington             0.2                0.3             0.4           0.8
----------         ---------          ---------       ---------      --------
Thoresby               0.4                0.3             0.8           1.2
----------         ---------          ---------       ---------      --------
Welbeck                0.3                0.5             0.7           1.3
----------         ---------          ---------       ---------      --------
Total Ongoing          3.2                3.2             7.2           9.0
----------         ---------          ---------       ---------      --------


Riccall                0.4                0.3             1.1           0.6
----------         ---------          ---------       ---------      --------
Stillingfleet          0.2                0.3             1.4           1.3
----------         ---------          ---------       ---------      --------
Wistow                 0.0                0.3             0.2           0.9
----------         ---------          ---------       ---------      --------
Total Selby            0.6                0.9             2.7           2.8
----------         ---------          ---------       ---------      --------
      

Total Deep Mines       3.8                4.1             9.9          11.8
----------         ---------          ---------       ---------      --------
Surface Mines          0.6                0.9             1.7           2.7
----------         ---------          ---------       ---------      --------
Total Company          4.4                5.0            11.6          14.5
----------         ---------          ---------       ---------      --------





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