The company reported a pre tax profit before exceptional items of £8.4 million for the year ended December 2002. This was dragged down by pre tax exceptional items of £91.5 million.
Commenting on the results, Gordon McPhie, chief executive of UK COAL, said: “Turmoil in the UK electricity generating industry, low international coal prices, a weakening US dollar, closure costs and unexpected adverse geological conditions, particularly at the Daw Mill and Selby collieries, all impacted on UK COAL’s performance and results in 2002.”
Among the highlights of the year, UK Coal reported an underlying improvement in deep mines performance and good progress with cost cutting initiatives. Output of coal from UK operations totaled 19.5 million tonnes (2001:19.6Mt).
See related production table, link below.
UK Coal currently has 12 operational deep mines, some of which are due to close as the focus shifts to lower-cost, higher productivity pits extracting coal from seams with a lower risk of geological disturbance. The closure of the Prince of Wales colliery in August last year will be followed by the closure of Clipstone in Nottinghamshire in mid-April this year. A phased closure of the Selby complex has begun expected to continue till early 2004.
Following an operational review of all remaining deep mines, UK Coal is introducing measures to improve the performances of other collieries, principally Harworth, Maltby and Ellington.
A business plan has been agreed for continuing operations at Harworth, subject to the result of seismic surveys, expected by April.
“We are discussing a viable, ongoing plan for Maltby that is dependent on the unions and workforce agreeing to different working arrangements,” UK Coal said.
The Daw Mill longwall mine in the West Midlands, appears finally to have turned the corner in terms of poor ground conditions.
Production was severely affected by geological conditions not previously encountered in a fully developed panel of coal. These geological conditions reduced output at Daw Mill in the second half of the year to an average of 4,000 tonnes per week. However, since the turn of the year, conditions improved markedly, resulting in weekly output averaging 35,000 tonnes for the first two months.
In 2002 coal produced 32% of total UK electricity generation (2001: 34%) and UK power stations consumed some 47.5Mt (2001: 50.8 million tonnes). UK Coal’s share of the market, at 18.9Mt (2001: 20Mt), increased from 36% to 37%. Coal imports into the UK fell by 18%, from 27.1Mt to 22.1Mt.
