RNS Number:9175R - UK COAL PLC - 27 February 2007

Sale of Maltby Colliery

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UK COAL announces that its subsidiary, UK Coal Mining Limited ("UKCML") has today completed the sale of its deep mine operations at Maltby Colliery ("Maltby"), together with a transfer of operational assets and liabilities to a recently incorporated company, Maltby Colliery Limited ("MCL"), which is part of the Hargreaves Services plc ("Hargreaves") group of companies.

The total cash consideration paid on completion was £21.5 million, subject to any post-completion adjustment in respect of surface coal stocks held at Maltby, and will give rise to a profit of some £13 million.  The book value of Maltby's gross assets was £15.8 million as at 31 December, 2006.

Maltby, located near Rotherham in South Yorkshire, last year produced approximately 750,000 tonnes of coal and recorded an operating loss of some £18.2 million on turnover of some £32.7 million.  The mine employs around 470 people, who will now transfer to MCL.

Maltby has had a long-established relationship with Hargreaves, which has been the mine's second largest customer and is the UK's largest independent producer and distributor of coke products.  The metallurgical coal which Maltby produces is ideally suited to Hargreaves' needs.  The proceeds of the sale will be used
to reduce borrowings.

In order to facilitate the sale of Maltby, UKCML's coal supply contract with one of its customers, Drax plc, has been varied by mutual agreement to delete reference to Maltby Colliery as a specified point of supply.

Gerry Spindler, Chief Executive of UK COAL, said: "This is a sale that benefits all parties. Hargreaves is a major player in the solid fuel market and Maltby will fit comfortably with its business of producing quality smokeless fuels and in fuel distribution.  It will promote the production lifetime and the security of employment at Maltby.  For UK COAL, it secures a profit on disposal and enables us to focus on our core deep mining activities, whilst decreasing operational risks and, in parallel, continuing to develop our expanding property
business."

Gordon Banham, Chief Executive Officer of Hargreaves, said: "We are delighted to have reached this agreement with UK COAL.  This is a unique opportunity for us to acquire a well established British coking coal mine which is an ideal fit within the Hargreaves range of services.  The acquisition will safeguard the
jobs of the approaching 500 employees who work there and I am delighted to take Maltby forward as part of the enlarged Hargreaves group."

- Ends -

Enquiries:

UK COAL PLC                                            Gerry Spindler, Chief Executive Chris Mawe, Finance Director	Tel: 01302 751 751 Mobile: 07778 780 884
Media Citigate Dewe Rogerson                                 Anthony Carlisle                                       Laure Lagrange                                         Brett Jacobs	Tel: 020 7638 9571 Mobile: 07973 611 888 Tel: 020 7282 1056 Tel: 020 7282 2971
Hargreaves Services plc                                Gordon Banham, Chief Executive Officer Peter Dillon, Financial Director	Tel: 0191 373 4485
Media Buchanan Communications                                Diane Stewart Tim Anderson	Tel: 020 7466 5000