UK Coal output jumps but cuts full-year target

Britain’s biggest coal miner UK Coal posted a 22 per cent rise in production in the third quarter and said it remains on track to meet its full-year output guidance of around 6m tonnes for its deep mines.

However, the company cut its estimate for surface mines production to about 1.5m tonnes, from 1.6m previously, due to a delay in the opening of Huntington Lane.

It also said average prices received for its coal will be marginally below the previous expectation of around 2.00 pounds a gigajoule.

“Overall, with quarter three showing a small operating profit, mining output starting to show more consistent performance, and our asset sales on track, we remain cautiously optimistic about the remainder of 2010 and 2011,” the company said in a statement to the London Stock Exchange yesterday.

Net bank and other debt at the end of September was about $265m, up from $225m at the end of September 2009. It expects its debt to be reduced by the end of the year helped by positive operating profit in the fourth quarter and proceeds from the sale of surplus agricultural land. The group anticipates making an announcement shortly on its search for a new chairman.