Revenue jumped 18% and was in line to meet the company’s full-year expectations.

Chairman David Jones said higher coal prices had started to deliver increased cash flows as it reduced the proportion of its production needed to fulfil low-priced legacy contracts.

“In mining, our first-half output was proportionately more committed to satisfying older contracts, muting the positive impact of the increased market price for coal,” Jones said.

“In addition, first-half production was constrained and was marginally lower than original expectations, principally reflecting the timing of face changes at Kellingley and Welbeck.

“For the second half, while there may always be unpredictabilities, we expect significantly higher production at a significantly higher sales price.”

He added the 45% jump in the market price of coal from the start of the year to the end of July transformed the company’s outlook for its mining operations.

“In our deep mines, Daw Mill is working through its two-year-long panel and, while Kellingley and Thoresby continue to face difficult coal conditions as they work their way through the last of their current seams, the investment programs are well on track to enable access to their further substantial reserves from mid and late 2009, respectively,” Jones said.

He said geological work had also begun to enable the company to decide on the economic viability of reopening its Harworth mine.

Welbeck will continue to mine its remaining resources until they are exhausted at the end of 2009.