Trading Statement

UK Coal PLC
14 December 2005


                                                              14th December 2005

                                  UK COAL PLC
                                 TRADING UPDATE


Ahead of entering the close period, UK COAL PLC ('UK COAL' or the 'Company') is
giving the following pre close trading update covering the period up to the end
of November 2005. It is anticipated that the results for the year ended 31st
December 2005 will be announced on Thursday 2nd March.


Deep Mines


Good progress on operational initiatives has continued to improve performance
and better average selling prices have been achieved in the five months to the
end of November as higher priced contracts take effect. Selling prices in the
five months have been £1.36 per gigajoule (first half year: £1.30 per
gigajoule).

The Deep Mines have been returned to profitability in the three months to
November and, in this period, unit costs have been reduced to £1.30 per
gigajoule.

The full five month period to the end of November however includes a period of
low production in July and August when the new faces installed in the second
quarter were being commissioned. As a result, total output in the five months to
the end of November is 3.8 million tonnes and unit cost of production has been
£1.58 per gigajoule (first half year: £1.68 per gigajoule).

Total exceptional items in the second half year are anticipated to be around £24
million (first half year: £23 million, excluding investment aid and profit on
sale of businesses), principally comprising certain costs of mothballing
Rossington and Harworth which, in accordance with accounting standards, were not
provided in the first half.

Other exceptional items relate to head office redundancy costs, following an
overhead reduction programme, costs for recovery projects following force
majeure events announced in January, provision for the potential repayment of
certain investment aid in respect of closed and closing collieries and
impairment of fixed assets, mainly in respect of the closing collieries.

Net debt is £105 million at the end of November (June 2005: £85 million),
including leasing and hire purchase agreements but excluding balances held in
respect of insurance requirements and subsidence security funds.

Coal stocks have been increased by 103,000 tonnes since June 2005 to give more
operational flexibility, and at the end of November amounted to 472,000 tonnes
(November 2004: 699,000 tonnes).


Surface Mines


Overall, surface mining made a profit of £0.2 million in the five months to
November 2005 (2004: Loss of £2.2 million). Additionally, the surface mining
business has incurred £5.4 million of costs on restoration and rehabilitation of
former surface and deep mine properties. The cost of this work has been either
capitalised or charged against previously reserved liabilities set up on the
inception of the mining schemes.

Surface mine output in the five month period to the end of November fell to
377,000 tonnes (first half year: 570,000 tonnes). Unit costs were £1.31 per
gigajoule (first half year: £1.28 per gigajoule).

There still remains 920,000 tonnes to extract from current operations together
with a further 1.5 million tonnes from schemes which already have planning
approval.

Whilst no new planning approvals were received in the five month period, three
sites containing 2.7 million tonnes have been submitted to Public Inquiry on
appeal and, subject to approval, would be available to start extraction in late
2006.

The Company, which has a land bank containing up to 100 million tonnes of coal,
has submitted planning applications for a further three new sites containing 1.6
million tonnes of reserves. We hope to start production on these sites in 2006.

The main sites with permission to extract coal or which are also in the planning
process are listed below.

Site                                   Tonnage                 Remaining tonnage

Maidens Hall Extension               1,700,000                       920,000
Cutacre                              1,500,000                     1,500,000

Sites with Planning                  3,200,000                     2,420,000

Stoney Heap                            257,000                       257,000
Sharleston Colliery                    360,000                       360,000
Stobswood North                        920,000                       920,000
Steadsburn                           1,000,000                     1,000,000
Long Moor                              725,000                       725,000
Lodge House                          1,000,000                     1,000,000

Sites in Planning                    4,262,000                     4,262,000



Property


Property proceeds in the five month period to the end of November were £5.0
million (2004: Nil). This reflects the disposal of land following the extraction
of value after appropriate development or receipt of planning approval.


Rental income on the commercial and business park portfolio continues to grow
and planning applications in respect of 235 acres of land are awaiting approval.
Total profit in the five month period to the end of November amounts to £4.9
million, including profit on disposals of £3.9 million.


Power Generation


Harworth Power, UK COAL's power generation subsidiary, has 32 MW of installed
methane power generation capacity, and planning permission to erect 3 wind
turbines. Planning applications in respect of a further 37 turbines are in
progress.

Power generation continues to increase and the business generated a profit,
including emissions trading credits, of £1.1 million in the five month period to
the end of November 2005.


Outlook


The continuing five deep mines are expected to return to overall profitability
in 2006, dependent on the continuation of the mining conditions experienced in
the three months to November 2005.

At the end of November 2005, total coal under contract to 2009, including an
estimate of sales to non Electricity Supply Industry markets, was 33.1 million
tonnes, with average maximum expected proceeds across all years (in 2005 prices)
of £1.45 per gigajoule and minimum proceeds of £1.35 per gigajoule. These prices
are subject to inflation at full RPI and are dependent upon the out-turn of
international coal prices.


We are committed to maintaining a significant surface mining business and will
continue to actively pursue planning applications in respect of our extensive
surface mining land bank.

We will continue to develop our property business by investing sales proceeds to
enhance the value of the property portfolio through development, marriage and
planning gains.

Harworth Power will continue to pursue its interest in renewable and green
energy generation, building capacity through direct investment and joint
venture.

During 2006, payments of around £15 million in respect of redundancy costs
provided at the end of 2005 will be made, along with additional payments to
reduce the pension deficit (£10 million). A further £15 million will be paid to
restore former surface and deep mines, but this should further enhance the
property value.


Enquiries:
Gavin Anderson & Company                      020 7554 1400
Ken Cronin
Michael Turner



Note 1

                                      5 months to                5 months to
Production                            Nov 05 (mt)                Nov 04 (mt)

Ongoing Collieries
Daw Mill                                  1.0                        1.2
Kellingley                                0.7                        0.5
Maltby                                    0.6                        0.8
Thoresby                                  0.4                        0.5
Welbeck                                   0.4                        0.3

Sub Total - ongoing collieries            3.1                        3.3

Other closed or closing mines             0.7                        0.8

Total Deep Mines                          3.8                        4.1

Surface Mines                             0.4                        0.7

Total Production                          4.2                        4.8







                      This information is provided by RNS
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