Contract Update

Tanfield Group PLC
17 May 2006



                               Tanfield Group plc


                                 TNT Agreement


Tanfield Group today announces that its zero emission vehicle operation, Smith
Electric Vehicles (Smith), has entered into an agreement with TNT, the parcel
delivery business.


Smith will provide its new 'Newton' 7.5 tonne electric vehicles to TNT. From the
3rd quarter of 2006, TNT will deploy the vehicles in Central London, for trials
in various logistics and delivery operations.


The new vehicles utilise the Faraday drive line technology developed for the
current Smith models. This has been adapted to accommodate greater payload
capability, to suit TNT's operational requirements.


The Board of Directors believe that there is an opportunity to sell significant
volumes of this type of zero emission vehicle for urban logistics and delivery
operations.


Discussions are ongoing with a number of large fleet operators, both in the UK
and abroad.


Enquiries:


Roy Stanley, Group Executive

Tanfield Group plc                                     Tel: [phone]



Ruari McGirr

Daniel Stewart & Co plc                                Tel: [phone]



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