UK Coal caves in on profits warning

SHARES in mining company UK Coal, one of four public companies chaired by Railtrack boss John Robinson, have crashed following a profits warning. The firm, formerly RJB Mining and formed from the privatisation of British Coal, cut its forecast production for the second half from 9m tonnes to about 8m.

There could be more strikes in the wings. Chief executive Gordon McPhie said talks with unions would start this week in a bid to convince miners to work around the clock, including weekends. The stock plunged 9p to 89p.

The company's fresh problems stem from the opening of a new face at the Daw Mill colliery in Warwickshire. Part of the tunnel has caved in, meaning production will not start until April, six months behind schedule. McPhie said the problem should have been dealt with months ago. It also lost output at the Rossington colliery in Doncaster, due to strikes.

UK Coal ensured mining analysts were not in the City to comment on its latest failure by taking them on a site visit. >Robinson, who is based at Railtrack and refused to discuss UK Coal's problems, is also chairman of building group George Wimpey and packaging firm Low & Bonar, whose shares have fallen from 109p in February to 67 1/2p.