UK Coal pulls out of merger talks

UK COAL, operator of the only deep mine in the West Midlands, confirmed today that merger talks with Hargreaves Services have now ceased.

The Doncaster-based firm said that it had received notification from Hargreaves that it no longer wished to proceed with a merger proposal and that accordingly the firm was no longer in an offer period.

Hargreaves said that while recognising that UK Coal had many “valuable assets” it did not intend to pursue such a merger.

UK Coal announced in March that it was in merger talks – a tie-up that could have mitigated the negative effects of UK Coal’s exposure to deep mines.

The firm said today that it had completed trasitioning the production profile of its deep mining business.

New seams at Kellingley and Thoresby are in full production and Daw Mill in Warwickshire has completed the ramp-up on its new panel

Current rates of production from each mine are in line with expectations and the group continues to expect to achieve 2010 productions of around 7.6 million tonnes in an improving pricing environment.

The group’s property business also continued to perform in line with expectations.

UK Coal added that the programmes announced in April to pursue the disposal of a significant proportion of the group’s agricultural estate and to explore joint-venturing the development of a larger part of the group’s brownfield land portfolio, although at an early stage, were attracting significant interest.