The United Kingdom’s biggest coal mining company, RJB Mining, has posted a pre-tax loss of £10.2 million for the six months ended June 30 (£133 million in 1999) on a turnover of £381.7m against £345.2m in the first half of 1999.
Total coal production for the period was 10 million tonnes, with 7.9Mt of that from deep mine operations. Surface mining operations produced 2.1Mt.
Commenting on the results, Richard Budge, chief executive of RJB Mining said: "Strong sales and cash flow have been achieved in the first half of the year. Our business continues to be cash generative and with transitional aid promised for the UK coal industry, we are well placed to exploit the increasingly optimistic trends in the World Coal Market."
"The company remains focused on cost reduction, balancing sales with production, and on maximising value to shareholders in the most appropriate ways possible."
Coal sales were described as robust in the first half year with an increase in sales volumes to 12Mt (1999: 11.4Mt) reflecting the generally stronger than expected market for coal in the UK.
Electricity generation increased by 1.5% compared with the previous year, and this, combined with a reduction in nuclear power output, contributed to a 10.5% increase in coal use for electricity generation, RJB's main market.
Coal sales agreements concluded during the first half-year include a five year 25.5Mt supply contract for AES Drax Power, valued at around £700 million.
Deep mine production in the period was 7.9Mt (1999: 9.2Mt). Underground mine production was affected by scheduled development work, leading to higher unit costs in the first half of the financial year. The number of planned production panel changes for the year total 26, with 15 changes occurring in the first half of the year, RJB said.
RJB said the decision to close Ellington and Clipstone collieries had impacted on production, but for the interim operations at the two mines had restarted in response to the UK government's intention to give aid to coal mines.
Of the £11.2 million capital expenditure, spent on development £5.1 million was spent on development work. Levels of capital expenditure are expected to increase in the next 12 months to complete the development of the new mining areas at Daw Mill and Riccall collieries and resume production at Ellington.
"Our operations in Australia, which predominantly comprise CIM Resources, produced sales of £12.5 million from 800,000t of coal, resulting in a loss attributable to the Group of £0.4 million.
“These results were at similar levels to the equivalent period in 1999, prior to the business becoming a subsidiary. Coal prices in the Australian market are continuing to show signs of improvement and this should be reflected in future results," RJB said.
On the rumoured takeover of RJB, the company said while it had received a preliminary approach, no formal offer had been received.
"Irrespective of whether an offer is received, the company fundamentally has a good forward sales order book, long-term production assets, a low level of borrowings and a valuable long-term property portfolio," the company said.
