Ellington Colliery closure

UK Coal PLC
26 January 2005



                                                                 26 January 2005

                  FLOOD ENDS PRODUCTION AT ELLINGTON COLLIERY

UK COAL today announced it has been forced to cease production at Ellington
Colliery in the North East of England for safety reasons following the
penetration of water on the colliery coal face and unacceptable risks associated
with extracting limited nearby reserves. Extensive round-the-clock pumping over
the past 13 days to lower the water levels on the face, and the supply roads
leading to it, have been unsuccessful.

Ellington has produced around 12,000 tonnes of coal a week, most of which was
supplied to the nearby Alcan power station. Supplies of coal to Alcan are
currently being maintained from stocks of around 150,000 tonnes at the colliery,
and surface mining operations elsewhere in the region.

UK COAL Chief Executive Gerry Spindler said : 'The loss of any mine in these
circumstances is a bitter blow, particularly for our employees and the local
communities in which they live. However, the safety of our employees is
paramount. Whilst we have contained the flow, the face is flooded and mining
adjacent reserves carries unacceptable levels of risk. We are left with no
realistic option but to close the mine.'

Added Mr. Spindler: 'We could not have asked for, or received, more commitment
than that given by the Ellington workforce, and it is a great sadness that their
attempts to maintain viable deep mine operations for some years to come have
been so abruptly terminated.'

Ellington Colliery made an estimated loss in 2004 of £11.0m.  The cessation of
production will result in the loss of 340 jobs and in a non-cash write-down of
£4 million in respect of its operations in the 2004 financial year; the
additional costs of closure, including redundancies, amount to £6 million and
will be recognised in the 2005 accounts in accordance with UK generally accepted
accounting principles. Prior to shaft filling, capping and surface remedial
works estimated at £3 million, the closure will be cash neutral in 2005.


MEDIA CONTACTS:

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

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


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