Mining firm making progress on cutting back on its debts

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DONCASTER based mining firm UK Coal says production is steady and the company has made progress reducing its heavy debt pile.

The Harworth-based group, Britain’s biggest coal mining firm, operates three deep mines, and also owns mothballed Harworth Colliery.

It said production in the first three months of the year was ‘steady and in line with expectations’ at 2.1 million tonnes, more than double the one million tonnes a year ago.

Of this, 1.6 million tonnes was from its deep mines and 0.5 million tonnes was from its surface mines.

The group said the installation of new coal faces at both Kellingley deep mine in West Yorkshire and Thoresby in Nottinghamshire had progressed well and both are now ready for operation.

It has also extended the life of the current panel at Daw Mill in the West Midlands by several months to offset the risk of delay in the installation of its new panel.

UK Coal said Harworth Estates, its property business, continues to progress on selling surplus land.

It sold 1,500 acres of agricultural land in the first quarter for £10.5m. The proceeds were used to pay down debt, which stood at £220.7m at the end of the quarter. That compares with £242.4m at the end of 2010.

UK Coal said major shareholders Peel Holdings has extended the maturity of a £10m loan to July 31, 2012.

The company is still seeking funds to reopen Harworth Colliery.