Output was behind expectations for all four of the company’s underground coal mines with the group’s operations producing 1.8Mt for the quarter and 5.5Mt for the year to date.

Difficult geological conditions are expected to continue at the Kellingley and Thoresby deep mines for the rest of the year before operations are moved into new areas in the new year.

Kellingley will move to the Beeston seam in mid-2009, while Thoresby will start working in the Deep Soft seam at the end of next year.

Improved and predictable production is expected from both new areas.

While production was lower than expected, this was partially offset by higher sales.

“It is disappointing that the geological conditions at Kellingley and Thoresby are likely to keep run-rate of production at these mines lower than we have previously expected until they can access their new seams towards the end of next year,” UK Coal said.

“This, and the recent drop in market price of coal from its record levels earlier this year, has a direct impact.

“However, the current and expected future market prices of coal are far higher than in the past and this, coupled with the run-off of the old legacy contracts, is thoroughly positive for the longer-term future of our business.”