British coal industry: Coal back in profit after six yearsadmin
The rebirth of the British coal industry appeared to gather pace this morning, as UK Coal revealed that it is on course to make its first profit in six years on the back of sharp increases in the price of the commodity.
UK Coal expects pre-tax profit for the six months to June to be £7m compared to a loss of £31m in the same period last year, according to the company’s trading update. Sales for the first half were up 18pc at £193m on production of 5.5m tonnes.
The last time UK Coal made an annual pre-tax profit was 2000 when it stood at £17.8m.
UK Coal welcomed the Government’s Energy Review last week which it said underscored the importance of coal-fired power generation.
The company said this morning: “UK Coal is now going to work hard to secure contract terms which will allow the company to invest in new mining operations and help deliver the Government’s energy policy goals”.
However, UK Coal announced last month that Harworth mine in Nottinghamshire, was set to be mothballed as the company was unable to secure sales to justify the investment to access further reserves. UK Coal said this morning it was still trying to secure a market for Harworth’s coal which would allow the pit to stay open.
In May UK Coal said five of its seven pits and 1,500 jobs were at risk unless it could force through price rises with major customers like Eon, Drax and ã‰lectricitã© de France.
Coal has doubled in price in the last two years but UK Coal has been slow to benefit as it has been locked into long term contracts at lower prices.