Following an original aid application last August, UK Coal submitted a revised mining plan aimed at reducing operational losses at Ellington. Expensive bord and pillar extraction has since been abandoned. As part of this plan the cost of developing reserves in the K3 South District of the mine have been estimated at £17.5 million.

Other plans to increase the amount of productive time available at the coal face will require an improvement in underground manriding. UK Coal has also secured a new two-year contract for Ellington coal with Alcan Smelting and Power, commencing in October.

The company also reported earlier this week that production for the first three months of the year was 3.8 million tonnes compared to 5.1Mt a year earlier.

The deep mines produced 3.2Mt (2003: 4.1 million tonnes) while surface mines produced 600,000t (2003: 1Mt).

The lower production at the deep mines compared to 2003 is a result of reduced deep mine operational performances and face changes at Maltby and Kellingley, said Chairman David Jones at the company's annual meeting.

Production has also been lost at Kellingley due to continuing industrial action around the introduction of flexible working, successfully introduced at other company mines. Mine and coal union NUM officials have had discussions aimed at increasing machine utilisation, manpower levels and output.

The coal union, NUM reportedly proposed establishing two production faces. But UK Coal’s analysis of the proposal indicates this would entail switching to advance mining, required development performances never consistently achieved, create production bottle-necks and require an investment of about £30 million. The result would be little extra output compared to working a single retreat face more extensively.