11th Aug 2005 07:30
UK Coal PLC11 August 2005 11th August 2005 DRAX AND UK COAL REACH AMICABLE AGREEMENT ON COAL SUPPLY ARRANGEMENTS UK COAL Mining Limited ("UK COAL") has today announced that it has amicablyresolved the force majeure dispute between itself and Drax Power Limited ("DraxPower"). The settlement amounts to the re-pricing and re-phasing of the delivery of theshortfall of 750,000 tonnes of coal previously notified in UK COAL's forcemajeure claim. The shortfall amount will now be delivered to Drax Power by March2006 at prices higher than the existing contract price but lower thaninternational coal prices. The agreement between the two parties also provides that UK COAL will not pursuethe force majeure notice served on Drax Power earlier this year. Following the successful outcome of the mine review process at KellingleyColliery, UK COAL will not rely on the circumstances or events set out in theforce majeure notice as a basis for any future force majeure claim. In addition, the settlement allows for the possibility of a limited deferral offurther volumes of coal. This arrangement will be subject to a cap on the volumeof coal which can be deferred as well as a time limit for delivery. Thesevolumes would be delivered to Drax Power at the existing contract prices. Gerry Spindler, UK COAL Chief Executive, commented: "Drax and UK COAL have along standing commercial relationship which helps provide stability for oursupplying mines and for electricity users who depend on power from the Draxstation. I am confident that that partnership will continue to benefit allparties for many years to come." Media Contacts: UK COALOperationalNigel Yaxley 01302 755113Stuart Oliver 01525 381759 / 07774 231178 FinancialKen Cronin / Michael TurnerGavin Anderson & Company 020 7554 1400 DRAX POWERMelanie WedgburyDrax Power Limited 01757 618381 David Trenchard/Peter HewerTulchan Communications 020 7353 4200 Notes to Editors 1. On 10 February 2005, UK COAL gave notice of force majeure under its existingcoal supply arrangements with Drax Power, detailing events of force majeure attwo of their pits. Under this notice, UK COAL expected a shortfall of 750,000tonnes of coal during the contract year to March 2005. In addition, UK COALestimated a possible shortfall of 500,000 tonnes in each further year up to theend of the contracts in 2009. 2. On 14 February 2005, Drax Power issued a press statement rejecting UK COAL'sclaim of force majeure. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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