8th August 2005

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Rossington Colliery

In a trading statement issued on July 20 in which UK COAL announced anticipated operating losses of around £30m for the first half of this year, the Company referred to output levels from Rossington Colliery being insufficient to support further investment in continued coal production.

Since that time, we have carried out a further review of the options available to us and concluded that the only realistic chance of a viable future depends on the introduction of new working practices which will increase the number of hours coal cutting equipment is fully utilised from around 105 to 140 hours. This will not involve men working more hours, on average, than they typically work now, but will require a larger element of working at weekend to increase output.

A move to a revised shift pattern will:

• increase machine available time and increase output;

• will require mineworkers to attend on only 7 days in every 14 days;

• will trigger a premium payment of £60 per week per man; and

• improves the chances of earning incentives payments.

But most importantly, it creates the best possible future for the mine.

The situation has been explained to the mining unions at Rossington, and each employee is being asked to indicate whether they are prepared to work revised shaft patterns. An illustration of a typical revised working pattern is being provided.

While we seek to establish arrangements which will give Rossington an extended life, we cannot guarantee there will not be some job losses at Rossington within the next three months. How many and when will be determined by the response to revised working patterns.

If closure is the final outcome, it is unlikely UK COAL will be able to redeploy many of the Rossington men at other collieries.