Britain’s largest coal producer has announced 2009 pre-tax losses of almost £130 million.

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Britain’s largest coal producer has announced 2009 pre-tax losses of almost £130 million.

UK Coal, Britain’s largest coal mining company, has announced 2009 losses of almost £130 million in what it describes as “an extremely challenging year for the Group”.

Total production for the year fell to 7 million tonnes from 7.9m, while the Group’s financial results revealed a pre-tax loss of £129.1m, compared to a loss of £15.6m in 2008.

David Jones, UK Coal Chairman, commented on the results: “The financial results for 2009 are not those we planned for. The lower production volumes to this point, and the consequential deferral of contract delivery commitments, have somewhat delayed the timing of when we will fully benefit from the new supply contracts that we have put in place.

“As a result, our cash performance has been significantly affected and our debt has increased with insufficient headroom for the Group, in particular over the next seven months’ peak funding period.”

While the findings have had an impact on this year’s first quarter results, new contracts and developments to its property portfolio look set to help boost profitability, while the Group’s planned disposals of agricultural acreage are expected to help reduce its debt.

As the largest producer of coal in the country, last year UK Coal mined 15% of the total amount of coal burned in the UK – the equivalent amount needed to produce 5% of the country’s electricity requirements.