DRAX contract agreed

UK Coal PLC
11 August 2005


                                                                11th August 2005


                   DRAX AND UK COAL REACH AMICABLE AGREEMENT
                          ON COAL SUPPLY ARRANGEMENTS



UK COAL Mining Limited ('UK COAL') has today announced that it has amicably
resolved the force majeure dispute between itself and Drax Power Limited ('Drax
Power').

The settlement amounts to the re-pricing and re-phasing of the delivery of the
shortfall of 750,000 tonnes of coal previously notified in UK COAL's force
majeure claim. The shortfall amount will now be delivered to Drax Power by March
2006 at prices higher than the existing contract price but lower than
international coal prices.

The agreement between the two parties also provides that UK COAL will not pursue
the force majeure notice served on Drax Power earlier this year.

Following the successful outcome of the mine review process at Kellingley
Colliery, UK COAL will not rely on the circumstances or events set out in the
force majeure notice as a basis for any future force majeure claim.

In addition, the settlement allows for the possibility of a limited deferral of
further volumes of coal. This arrangement will be subject to a cap on the volume
of coal which can be deferred as well as a time limit for delivery. These
volumes would be delivered to Drax Power at the existing contract prices.

Gerry Spindler, UK COAL Chief Executive, commented: 'Drax and UK COAL have a
long standing commercial relationship which helps provide stability for our
supplying mines and for electricity users who depend on power from the Drax
station. I am confident that that partnership will continue to benefit all
parties for many years to come.'



Media Contacts:

UK COAL
Operational
Nigel Yaxley                     01302 755113
Stuart Oliver                    01525 381759 / 07774 231178

Financial
Ken Cronin / Michael Turner
Gavin Anderson & Company         020 7554 1400

DRAX POWER
Melanie Wedgbury
Drax Power Limited               01757 618381

David Trenchard/Peter Hewer
Tulchan Communications           020 7353 4200



Notes to Editors

1. On 10 February 2005, UK COAL gave notice of force majeure under its existing
coal supply arrangements with Drax Power, detailing events of force majeure at
two of their pits. Under this notice, UK COAL expected a shortfall of 750,000
tonnes of coal during the contract year to March 2005. In addition, UK COAL
estimated a possible shortfall of 500,000 tonnes in each further year up to the
end of the contracts in 2009.

2. On 14 February 2005, Drax Power issued a press statement rejecting UK COAL's
claim of force majeure.





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