THE City expects annual losses to widen at UK Coal after a trading update was overshadowed by the fallout from a tragedy at one of the group's collieries last week.
UK Coal yesterday said it had suspended production at the Kellingley site in Yorkshire for up to another fortnight following the death of a mineworker, Ian Cameron, 46.
Further weighing on the trading update was news from the company disclosing it
had received summonses from the Health & Safety Executive (HSE) last week relating to four deaths in separate incidents at two of its collieries.
UK Coal is facing a total of ten charges over three deaths at its Daw Mill site in Warwickshire between 2006 and 2007, and another at its Welbeck colliery near Mansfield in 2007.
An apparent equipment failure is thought to be to blame for the incident in which Cameron died and UK Coal said the HSE had required it to halt production at the Kellingley site while alterations are made.
A UK Coal spokesman said the firm was stopping production "while suspect valves on the roof supports of the coal face are changed".
The firm added: "Whilst we believe that we continue to make improvements in our safety culture, as part of our drive for zero incidents, it is with deep regret that we must report the recent loss of the life of a colleague at Kellingley.
"Both company and HSE investigations are continuing into the accident.
"Our condolences go to relatives and friends of our colleague."
The HSE said it was aware of the latest incident and had launched an investigation.
Its prosecution of UK Coal over the previous deaths is due for an initial court hearing at Doncaster Magistrates' Court on 26 November.
UK Coal said the latest closure would depress its total production for the year from its deep mines to an estimated 6.2 million tonnes, from a previous expected range of between 6.4 million and 6.6 million tonnes.
UK Coal said in its latest update that production across its mining operations in the year to September was broadly the same as 2008 – at 5.4 million tonnes compared with 5.5 million tonnes.
But it added: "The recent tragedy at Kellingley has, however, introduced an increased degree of uncertainty regarding the output from Kellingley for the year."
Third-quarter group revenue fell to £95 million compared with £119m last year. The average sales price in the third quarter was £2.06 per gigajoule, down from £2.31 in the same period last year.
UK Coal said it expected the average realised sales price for the year to remain within its earlier estimate of £1.85 to £1.90 per gigajoule.
The company's net debt at the end of September stood at £168m, stripping out pre-payments and loans from generators.
Chris Millington, of broker Numis Securities, said the temporary closure of the Kellingley site, as well as a slightly lower-than-expected coal price, meant he expected UK Coal's annual losses to widen from an initial forecast of £79.2m to £91.2m.
Another analyst said: "The company does not have its problems to seek at the moment. But the trading statement itself was pretty much as expected."
UK Coal's shares closed down 4.25p, or 4.5 per cent, at 91p, having earlier touched a day low of 89p.
