10th Dec 2007 07:00
UK Coal PLC10 December 2007 UK COAL PLC 10th December 2007 NEW FOUR YEAR COAL CONTRACT WITH EDF ENERGY Underpins £55 million investment at Thoresby Colliery to access 12 million tonnes of additional coal reserves UK COAL PLC, the county's biggest producer of coal and the developer of one ofBritain's largest brownfield property estates, today announces an important newcontract to supply coal from its Thoresby Colliery in North Nottinghamshire topower generator EDF Energy. The contract enables UK COAL to commit to a £55 million investment programme atThoresby, to access a further 12 million tonnes of reserves and extend the lifeof the colliery by around 10 years. The contract with EDF Energy is for the delivery of four million tonnes of coalbetween 2009 and 2012 from Thoresby to EDF Energy's Nottinghamshire powerstations, Cottam and West Burton. After 2012, UK COAL will continue productionat Thoresby for a further estimated six years, with the flexibility to agree newlong term supply contracts, make "spot sales," or a combination of the two. EDF Energy is a long standing core customer of UK COAL. Today's announcementfollows last month's agreement with EDF Energy for the supply, over the next twoyears, of substantially all of the remaining planned production from UK COAL'sWelbeck Colliery, Nottinghamshire; and October's agreement for the supply ofalmost six million tonnes of coal to E.ON's Ratcliffe station, near Nottingham,over the next five years. Most of the E.ON coal will be supplied by UK COAL'sDaw Mill Colliery in the West Midlands. Nearly all the coal will be supplied to the EDF Energy and E.ON power stationsby rail. Jon Lloyd, UK COAL Chief Executive, said: "This is excellent news for all parties. For EDF Energy, it secures a continuedguaranteed source of quality coal produced on the doorstep of its powerstations. For UK COAL, it is a further significant advance towards us achievingmarket price for our coal production; it enables us to invest in profitablyopening-up major new reserves at Thoresby, and it thereby extends the life ofthe mine and the jobs of its employees for 10 years longer than had until nowbeen planned." Guy Buckenham, EDF Energy's Managing Director, Wholesale Markets, said: "Cottam and West Burton power stations have a key role to play in meeting theneeds of our customers. We are delighted that this coal supply agreement withUK COAL ensures that a significant proportion of our coal requirements willcontinue to be met by coal produced and supplied by local collieries." UK COAL is also planning market priced "spot sales" for coal produced across itsportfolio of deep and surface mines. The delivered cost of internationallytraded coal has almost doubled over the last 12 months. ENQUIRIES: Analysts and Investors:UK COAL Chief Executive Jon Lloyd Tel: 01302 755 002Group Finance Director David Brocksom Tel: 01302 755 005Citigate Dewe Rogerson Scott Fulton Tel: 020 7638 9571 Media:Citigate Dewe Rogerson Anthony Carlisle Tel: 020 7638 9571 Mob: 07973 611 888 Laure Lagrange Mob: 07768 698 731 Operations:UK COAL Stuart Oliver Tel: 01525 381759 Mob: 07774 231 178 EDF Energy:Senior Press Officer Jonathan Levy Tel: 020 7752 2265 Mob: 07875 112098 BACKGROUND NOTE: Thoresby Colliery: Thoresby Colliery dates back to 1925 and has traditionallybeen one of the most efficient and productive mines in the British coalfields.Employing 500 people, Thoresby's current working area involves extractingreserves in the Parkgate seam. These reserves were originally assigned to theneighbouring Ollerton Colliery, which closed in 1994, and are some 13 kilometresfrom the Thoresby shafts. Those reserves will be exhausted by late 2009. The new EDF Energy contract enables UK COAL to commit to an investment programmeof circa £55 million over the next four years, giving access to around 12million tonnes of additional coal reserves in the Deep Soft seam close to theThoresby pit bottom. Production from the new reserves is planned to commence inlate 2009 and continue until around 2108. Eleven coal faces are planned - each between 265 metres and 350 metres wide - inthe shadow of the successfully worked Top Hard seam which is some 180 metresabove, and over the footprint of the Parkgate seam some 37 metres below, thusbest seeking to avoid known geological faulting or bad ground. UK COAL: A mining, property and power company employing 3,100 people, UK COALhas its headquarters at Harworth Park, Harworth, near Doncaster, SouthYorkshire. Britain's biggest producer of coal, UK COAL operates four deep mines in theMidlands and Yorkshire, and four surface mines in the North East, the NorthWest, and the Midlands. Over 90% of UK COAL's annual output of almost ninemillion tonnes is sold to generate around 5% of Britain's electricityrequirements. The property division, managed by Harworth Estates, owns around 47,500 acres ofland and other property. As at the end of June, 2007, with a RICS valuation of£398m, the Company estimates the portfolio land value in 2012 with the benefitof planning consents to be £900m. Over 70 sites, covering an area of over 3,300acres have been identified for development, creating opportunities for buildingaround 20,000 homes and 29 million square feet of employment space over thenext six years. The power business, Harworth Power, includes the generation of electricity usingengines to burn methane extracted from collieries for safety reasons, and thedevelopment of wind farms on 10 or more sites, mainly in the North East and theMidlands. For more information, please go to www.ukcoal.com UK COAL PLC,Harworth Park,Blyth Road, Harworth,Doncaster,South YorkshireDN11 8DBTel: 01302 751751Fax: 01302 751420 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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