Phased Mine Closure

UK Coal PLC 30 January 2002 30 January 2002 UK COAL PLC PHASED MINE CLOSURE UK COAL PLC announces that further investment at Prince of Wales Colliery, Pontefract, West Yorkshire cannot be justified because of adverse geological conditions in the limited remaining reserves. The colliery will therefore cease production in September this year when the two existing faces are exhausted. Employees will be offered alternative jobs at other Yorkshire collieries where output and efficiency can be increased. An operational review has considered a range of potential options. All involve the colliery making substantial losses for the foreseeable future due to difficult mining conditions caused by a combination of thin and fractured seams, poor quality coal, previous mining in the area or high subsidence costs. An independent survey, conducted by mining consultants on behalf of the Department of Trade and Industry, reached similar conclusions. Chief Executive Gordon McPhie commented: 'In these circumstances we cannot justify further investment at the colliery. With the skill and support of our employees, we can replace the output lost by the closure of Prince of Wales by increasing production at our other mines.' The review at Prince of Wales was launched last December after geological disturbances were encountered in a new area where mining operations were to be focused for the next six years. The financial consequences of the closure will result in a non-cash asset write down of the investment into the Went Edge area of Prince of Wales of £15.8 million, which will be an exceptional item in the 2001 results. Redundancy costs, which will be incurred in 2002, will be paid to those employees who are not offered alternative employment. With a history dating back to 1860, Prince of Wales is the oldest colliery still in production in the UK. In a typical year, the mine with its 500 employees, one of 14 operated by UK COAL, Britain's biggest producer of coal and smokeless fuel, produced about 1.3 million tonnes of coal, mainly for power stations. MEDIA CONTACTS: Financial Liz Morley/ Tel: 020 7457 2345 Fiona Grant Duff Operations Stuart Oliver Tel: 01525 381759 Mob: 07774 231178 This information is provided by RNS The company news service from the London Stock Exchange
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