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:  [phone]
                             Fiona Grant Duff

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


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