Phased Mine Closure

UK Coal PLC
10 February 2005





                                                              10th February 2005

                PRODUCTION TO BE PHASED OUT AT WELBECK COLLIERY
                -----------------------------------------------

UK COAL today announced that following a comprehensive review of revised mining
plans conducted over the past three months, and involving the entire workforce
at Welbeck, measures to allow the remaining five million tonnes of reserves to
be extracted viably have not been identified. As a consequence, mining will
cease when around 1.6 million tonnes of coal on the current and subsequent face
now being developed, has been extracted. Production is to be phased out over the
next 12 months.

UK COAL Chief Executive Gerry Spindler says: 'Despite the best endeavours of the
workforce at Welbeck, we have failed to secure ways of reducing the high-cost
gaps in production which are forecast in the current mining plans.'

The colliery lost £20m last year after geological problems, which resulted in
the loss of planned production capacity, reducing its annual output to 0.8
million tonnes - half of its target of 1.6 million tonnes.

Welbeck has been awarded a total of £7.8m in two tranches by the Dti under the
Coal Investment Aid scheme towards projects costing £27.5m to access reserves in
the Deep Soft seam and infrastructure improvements. UK COAL has so far qualified
for £3.5m of the award.

As a result of the run down of operations, UK COAL is reviewing the carrying
value of the assets associated with Welbeck Colliery. This will result in a
charge of around £13m which will fall in the 2004 accounting period.

In accordance with UK generally accepted accounting practices, redundancy costs,
depending on the level of transfers to other collieries, of up to £12m will be
made in the 2005 accounting period.

MEDIA CONTACTS:

Financial: Ken Cronin                                     Tel: [phone]
(Gavin Anderson & Company)                                Mob: [phone]

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

Chris Crouch                                              Tel: [phone]
                                                          Mob: [phone]




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