The company anticipated its pre-tax profit for the year at £69 million, four times that of 2006.

"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," the company said.

Total contracted forward sales now stand at 23.9Mt.

Production from UK Coal's four deep mines was 6.4 million tonnes, down on 2006 output of 7.5Mt.

The company attributed the fall to Daw Mill's non-production and the slower ramp-up to production on its new face in the fourth quarter, as well as a fall in output at Kellingley.

Kellingley is expected to pick up production in 2009 when it accesses higher quality reserves in the Beeston seam.

Of its deep mines, Daw Mill produced 2.2Mt, Kellingley 1.8Mt, Thoresby 1.4Mt and Welbeck 1Mt.

Surface mine production was 1.5Mt.