Trading Statement

UK Coal PLC
16 January 2008


16 January 2008


         UK COAL PLC - TRADING UPDATE FOR THE YEAR TO 31 DECEMBER 2007

 With a positive outlook for all its businesses, the Group continues to be well
             placed to deliver further growth in shareholder value.

UK COAL PLC ('UK COAL' or the 'Group') today provides the following trading
update in advance of the publication of its preliminary results for the year
ended 31 December 2007.

Overview

We expect to announce continued progress and growth in shareholder value with
Group pre-tax profits for 2007 anticipated to be in line with overall
expectations at around £69 million, an almost four-fold increase from 2006
(£17.6 million).

Outlook

With a positive outlook for all its businesses, the Group continues to be well
placed to deliver further growth in shareholder value.

Our Mining and Power businesses benefit from the high price of internationally
traded energy, driven by global demand. We have an increased ability to access
market prices as we continue to make significant progress in reducing the
proportion of our total coal output contracted for sale at historic prices.

Our Property business, Harworth Estates, is well placed to create value both
through planning gains over our diversified regeneration portfolio and from the
scope to realise property development profits and to build rental streams. In
spite of any short-term volatility, the longer term outlook for property in the
UK, with its structural shortage of land for development, remains positive.

Mining

Production

As expected, production from our four on-going deep mines of 6.4 million tonnes
was lower than in 2006 (7.5 million tonnes), reflecting principally, at Daw
Mill, the previously announced period of non-production and the slower ramp up
to production on its new face in the fourth quarter, and, at Kellingley, the
reduction in the rate of production until higher quality reserves are accessed
in 2009 in the Beeston seam.

Surface mine production of 1.5 million tonnes (2006: 0.6 million tonnes)
included the results of three new surface mines which commenced production in
the fourth quarter.

Coal output for the year was as follows:

                                                 2007                  2006
                                           million tonnes        million tonnes

Daw Mill                                              2.2                   2.7
Kellingley                                            1.8                   2.1
Thoresby                                              1.4                   1.5
Welbeck                                                 1                   1.2

On-going deep mines                                   6.4                   7.5
Total surface mines                                   1.5                   0.6
Ongoing operations                                    7.9                   8.1
Closed/sold deep mines                                0.2                   1.4

Total output                                          8.1                   9.5



Sales Pricing

Realised coal prices per gigajoule (GJ) in the period increased by circa 15% to
approximately £1.62 per GJ (2006: £1.41 per GJ).

We have been successful in our continued negotiations with customers to move our
overall sales prices closer to the world market price for coal and are
progressively moving the Group's contracts position towards a balance of
contracts at floating, capped and collared, and fixed (or RPI linked) prices.

As at 31 December 2007, total contracted forward sales to all customers had
increased to 23.9 million tonnes (31 December 2006: 17.9 million tonnes).

As at 31 December 2007, we estimate that the forward price for coal for delivery
during 2008, including the cost of transport into the UK, was equivalent to
circa £2.60 per GJ.  Based upon this forward price, we estimate that our
forecast output in 2008, both contracted and un-contracted, would be sold at a
price in the order of £1.75 - £1.80 per GJ.

Redundancy and Closure Costs

Redundancy and closure costs were lower than anticipated by circa £6 million,
benefiting in particular from the release of provisions following agreement with
HMRC on a dispute involving tax deductions arising on redundancies.

Property - Harworth Estates

Despite significant market turbulence in the final quarter, property valuation
gains in the income statement are expected to be circa £69 million (2006: £68.6
million).An estimated further £5 million (2006: nil) of valuation gains will be
taken directly to reserves, being the gains on properties which have been
transferred during the year from operating to investment property status.

Overall the RICS valuation of the property portfolio is expected to show a gain
of circa 20% over the period on a like for like basis.

Project Worth

Further good progress was made on our property development plan with 16 new
projects being added to the programme during the year, now making a total of 76.
Management estimates of the worth of our property portfolio in 2012 have
increased and now stand at £926 million (compared to £800 million estimated at
December 2006). These estimates are calculated on a consistent basis, being
based on property values as at the dates of the estimates and exclude
participation in any development phase profits.

Progress

Key projects launched in the year included the Eco Town bids for major housing
schemes (over the next 15-20 year period) at Rossington near Doncaster and at
Marley Hill, south of Newcastle.  The Government will shortlist 10 projects, out
of the 50 bids received, in the next two months.

In early January 2008, a planning application for 250 homes and 160,000 sq ft of
industrial space was approved at Edlington, Doncaster.  Negotiations continue
positively on our major scheme at Prince of Wales, Pontefract, where, following
the resolution of highway design matters, the Council is expected to grant
planning approval shortly.

Group Net Borrowings

Net borrowings for the Group at the year end were circa £55 million (December 31
2006: £51.8 million) including cash balances and deposits of circa £70 million
(2006: £45.9 million) of which £49 million was held in respect of insurance
requirements and subsidence security funds.

Enquiries:

Media:
Citigate Dewe Rogerson                                       Tel: [phone]
Anthony Carlisle                                          Mobile: [phone]
Laure Lagrange                                            Mobile: [phone]

Analysts and investors:
Jon Lloyd                                                     Tel: [phone]
Chief Executive, UK COAL PLC

David Brocksom                                                Tel: [phone]
Group Finance Director, UK COAL PLC

Scott Fulton, Citigate Dewe Rogerson                         Tel: [phone]
                                                           Mobile: [phone]

Notes to Editors:-

UK COAL is a mining, property and power company employing 3,100 people with 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 is currently operating six surface mines in the
North East, the North West and the Midlands.  Over 90% of UK COAL'S annual
output of coal is sold to generate around 6% of Britain's electricity.

Harworth Estates, the property business, owns around 46,000 acres of land. This
includes 76 sites, covering a developable area of 3,680 acres, which have been
identified for development, creating opportunities for building around 27,000
homes and 30 million square feet of employment space over the next decade.


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