MALTBY COAL MINE

Hargreaves Services plc provided a company update.

The mine performed largely in line with financial expectations. Production at just over 1 million tonnes was lower than projected, although the combination of a tight control on costs and a greater proportion of higher value coking coal in the product mix helped to maintain the forecast profitability.

Maltby Colliery generated revenues of £13.3m and an operating profit of £2.4m in the first six months. This was slightly below internal expectations, with the face equipment acquired with the mine becoming increasingly unreliable as the long T10 face was worked to completion. The change from T10 to the next face (T22) took place in January 2008 without any major issues and we are now producing on the T22 face with new equipment. We will continue to invest significant amounts in plant, equipment and drivage development to extend as far as possible, the life of the area of reserves currently being worked. When the colliery was acquired the expected life was stated as being 2015. With the investment we have made and continue to make, coupled with the expertise of our mining team, we now believe that the current reserves area will be generating coal until 2017. We are also currently undertaking a review of the technical and financial feasibility of reaching new areas of reserves, outside the current area of working, with a view to potentially extending the mine beyond the current forecast expected closure date of 2017.