Contract with EDF
UK Coal PLC
10 December 2007
UK COAL PLC
10th December 2007
NEW FOUR YEAR COAL CONTRACT WITH EDF ENERGY
Underpins £55 million investment at Thoresby Colliery to access 12 million
tonnes of additional coal reserves
UK COAL PLC, the county's biggest producer of coal and the developer of one of
Britain's largest brownfield property estates, today announces an important new
contract to supply coal from its Thoresby Colliery in North Nottinghamshire to
power generator EDF Energy.
The contract enables UK COAL to commit to a £55 million investment programme at
Thoresby, to access a further 12 million tonnes of reserves and extend the life
of the colliery by around 10 years.
The contract with EDF Energy is for the delivery of four million tonnes of coal
between 2009 and 2012 from Thoresby to EDF Energy's Nottinghamshire power
stations, Cottam and West Burton. After 2012, UK COAL will continue production
at Thoresby for a further estimated six years, with the flexibility to agree new
long term supply contracts, make 'spot sales,' or a combination of the two.
EDF Energy is a long standing core customer of UK COAL. Today's announcement
follows last month's agreement with EDF Energy for the supply, over the next two
years, of substantially all of the remaining planned production from UK COAL's
Welbeck Colliery, Nottinghamshire; and October's agreement for the supply of
almost six million tonnes of coal to E.ON's Ratcliffe station, near Nottingham,
over the next five years. Most of the E.ON coal will be supplied by UK COAL's
Daw Mill Colliery in the West Midlands.
Nearly all the coal will be supplied to the EDF Energy and E.ON power stations
by rail.
Jon Lloyd, UK COAL Chief Executive, said:
'This is excellent news for all parties. For EDF Energy, it secures a continued
guaranteed source of quality coal produced on the doorstep of its power
stations. For UK COAL, it is a further significant advance towards us achieving
market price for our coal production; it enables us to invest in profitably
opening-up major new reserves at Thoresby, and it thereby extends the life of
the mine and the jobs of its employees for 10 years longer than had until now
been planned.'
Guy Buckenham, EDF Energy's Managing Director, Wholesale Markets, said:
'Cottam and West Burton power stations have a key role to play in meeting the
needs of our customers. We are delighted that this coal supply agreement with
UK COAL ensures that a significant proportion of our coal requirements will
continue to be met by coal produced and supplied by local collieries.'
UK COAL is also planning market priced 'spot sales' for coal produced across its
portfolio of deep and surface mines. The delivered cost of internationally
traded coal has almost doubled over the last 12 months.
ENQUIRIES:
Analysts and Investors:
UK COAL Chief Executive Jon Lloyd Tel: 01302 755 002
Group Finance Director David Brocksom Tel: 01302 755 005
Citigate Dewe Rogerson Scott Fulton Tel: 020 7638 9571
Media:
Citigate Dewe Rogerson Anthony Carlisle Tel: 020 7638 9571
Mob: 07973 611 888
Laure Lagrange Mob: 07768 698 731
Operations:
UK COAL Stuart Oliver Tel: 01525 381759
Mob: 07774 231 178
EDF Energy:
Senior Press Officer Jonathan Levy Tel: 020 7752 2265
Mob: 07875 112098
BACKGROUND NOTE:
Thoresby Colliery: Thoresby Colliery dates back to 1925 and has traditionally
been one of the most efficient and productive mines in the British coalfields.
Employing 500 people, Thoresby's current working area involves extracting
reserves in the Parkgate seam. These reserves were originally assigned to the
neighbouring Ollerton Colliery, which closed in 1994, and are some 13 kilometres
from the Thoresby shafts. Those reserves will be exhausted by late 2009.
The new EDF Energy contract enables UK COAL to commit to an investment programme
of circa £55 million over the next four years, giving access to around 12
million tonnes of additional coal reserves in the Deep Soft seam close to the
Thoresby pit bottom. Production from the new reserves is planned to commence in
late 2009 and continue until around 2108.
Eleven coal faces are planned - each between 265 metres and 350 metres wide - in
the shadow of the successfully worked Top Hard seam which is some 180 metres
above, and over the footprint of the Parkgate seam some 37 metres below, thus
best seeking to avoid known geological faulting or bad ground.
UK COAL: A mining, property and power company employing 3,100 people, UK COAL
has its headquarters 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. As at the end of June, 2007, 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 an 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
UK COAL PLC,
Harworth Park,
Blyth Road, Harworth,
Doncaster,
South Yorkshire
DN11 8DB
Tel: 01302 751751
Fax: 01302 751420
This information is provided by RNS
The company news service from the London Stock Exchange UUGRUPUPMGQM
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