UK COAL contract with E.on

UK Coal PLC
10 October 2007

10th October, 2007


                            UK COAL PLC ('UK COAL')

              NEW FIVE YEAR COAL SUPPLY CONTRACT AGREED WITH E.ON


UK COAL, the UK's largest producer of coal and the developer of one of Britain's
largest brownfield property estates, today announces it has agreed terms for the
supply of almost six million tonnes of coal to electricity and power generator
E.ON over the next five years.



E.ON is a long standing, core customer of UK COAL. About 75 per cent of the coal
will be supplied from UK COAL's Daw Mill Colliery in the West Midlands, with the
remainder being supplied from surface mine sites in Leicestershire and
Derbyshire.  All the coal will be supplied to E.on's Ratcliffe power station,
near Nottingham, with the deep mined coal being delivered by rail and the
remainder from the two surface mine sites in the area being delivered by road.



The contract, which comes into immediate effect and runs to January 2012,
secures the continued delivery of coal at improved prices, more closely
reflecting the price of internationally traded coal and including annual
inflation rate increases from 2009.



Says UK COAL Chief Executive Jon Lloyd: 'This contract extends supply of coal to
one of our key customers at improved prices and will account for a significant
element of our Daw Mill mine's annual production.'



UK COAL is currently discussing term contract supply arrangements with other
power generators and is also planning market priced tonnage-based 'spot sales'
for coal produced at Daw Mill and other units.





ENQUIRIES


Financial:
Citigate Dewe Rogerson
Anthony Carlisle
Tel: [phone]
Mob: [phone]


Laure Lagrange
Tel: [phone]
Mob: [phone]


Operations:
UK COAL
Stuart Oliver
Tel:  [phone]
Mob: [phone]










BACKGROUND NOTE:



UK COAL is a mining, property and power company employing 3,100 people and
headquartered 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.  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 a developable 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
Midlands.



For more information, please go to www.ukcoal.com




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