The German producer said the result was underpinned by substantially higher coal prices, as well as strict cost management, optimised business processes, and an "uncompromising" customer focus.

Sales totalled E4.5 billion, generating cash flow of more than 12% and putting RAG Coal in a leading position within the RAG Group in terms of both sales and profitability.

The company's international mining division, with 18 mines and mine shareholdings in the United States, Australia and Venezuela, was its biggest source of earnings, beating its domestic coal sales, international coal trade and mining technology units.

RAG Coal chief executive Dr Jurgen Stadlhofer said "targeted measures" would be needed to maintain earnings at E80-100 million in the long-term given the high volatility of the world coal market.

These included employing modern mining methods, building and strengthening strategic partnerships and developing its mining technology and equipment product range.

RAG is also keeping a predatory eye on mines in the Unites States, "as a major, largely self-contained market", and Australia "as the biggest supplier to the world market".

"At the same time, South America is also becoming increasingly important as an export region," the company said.

At the end of 2001, RAG Coal had a worldwide workforce of 6500 people in 20 countries.