UK Coal Share Discussion Threads

[warbaby43] 07/2/2012 14:56

The bretheren may get some fun from sending this to their headbanger mates:



Its from the latest edition of the World Coal Association's ECoal - free via worldcoal.org

[kalkanite] 07/2/2012 14:23

Hi Warbaby

Thank you for your feedback. My thoughts on an increase in production was based on both a more focused management and also from memory I believe that the pay deal was worth about just over 4% pay rise for each year of the 2 year deal. With the economy in the state that it is in at the moment I concluded that the working terms and conditions must have been much in the companies favour and as a result targeted to increase production.

However, you give a compelling case for me to temper my expectations, I guess that the first quater result will be a good indication of what is to come.

With regards to the recent statement of profit being in line with expectations I noted that Digital look was predicting an EPS of 6.7p, however the company web site here....



has an average prediction for 2011 of 7.97p and 2012 average EPS prediction of 15.2p, implying a forward PE of just over 2.

Predictions are of course subjective but I think there are interesting times ahead.

K

[warbaby43] 07/2/2012 12:23

Looks to me an excellent write up K, with my only slight quibble being with your 8mt to which I would say regretfully - no chance, and especially no chance this year. The most shareholders can and should expect is 7.5mt with Daw Mill's new seam a difficult one to mine from, being of varying bandwiths and on a gradient. Indeed, all the geological problems and massive delay in its development give something of a pointer to the likely production problems to come. Remember too, that Daw Mill is still not out of the woods with a shadow still over its future. I would also add here that at the Shareholder Presentation in September we were cautioned that D Mill in 2012 would be more likely to be producing in the 40s pw rather than in the 60s. I promptly made the mental note, it being D Mill, to expect more like the upper 30s at best

As both Daw Mill and Kellingley have histories of difficult geology, the most likely way UKC are ever going to get to 8mt is via a significant expansion of surface mining. This would entail their making and obtaining far more planning apps than they have recently been. In turn, given the hostilities such applications invariably produce, that would require them to give far more attention to PR than they have hitherto done. Indeed, long past the time for the Surface Division to have its own dedicated PR expertise.

That aside, all other shareholders should be grateful to you for so assiduously propagating such a powerful case for UKC, and you most certainly have my gratitude for one.

[kalkanite] 02/2/2012 07:22

I have done a write up on UK Coal here...



Any comments welcomed

K

[leadersoffice] 24/1/2012 16:25

We used to get a nice juicy divi from UKC, oh the good old times.

[argylerich] 23/1/2012 13:35

well the markets seem happier too...

[loafofbread] 23/1/2012 08:06

If we can get Daw Mill back on track we could don the rose tinted at last?

For once a bloody good read. Everything else looking very good.

[warrabish] 19/1/2012 16:27

It's interesting you should mention the shaft proposals in this discussion. As a new entrant to the industry in the last decade it was my understanding that these proposals re-occurred around 2006. But that's by the by as your assumptions were correct.

And as stated I also think people are getting resources confused, as the 30s side and 300s side of the mine are reaching the conclusion of their productive life. Life extends further via drivage and access to the 400s panel which unless my memory fails me is suggested to be very resource rich. But this swings back to the shaft issue as you mentioned and very excessive transport and travel times.

Also I must add that the comments seemingly apportioning blame wholly onto the workforce are quite hilarious. Way to swallow the company propaganda, bravo.
I can categorically state with honesty that the present situation is the resultant of many many wrong decisions ranging from group, straight down to the men on the front line, you must remember, we only do as we are told.

But that doesn't resolve the situation at present, if it can actually be resolved. We are where we find ourselves.

[muckshifter] 18/1/2012 17:50

The extra shaft was "priced" by IMC at £110 million in 2003, IIRC, and the Daw Mill report was fairly insistent that it would be needed, to get beyond the 32mt for exactly the reason you describe - distance to the existing shaft. It was also made clear that if there was to be any chance of putting in that shaft the wheels needed to be put in motion immediately, ie in 2003. They said at that time that "a shift" achieved about 4.5 hours at the face after allowing for the travelling.
Regards.

[warbaby43] 18/1/2012 17:24

UKC being over optimistic - nah, impossible isn't it!!!

As it is Daw Mill is now mining over 10km from the shaft bottom and I had understood two or three years back that significant investment would be needed c2012/13 and I have seen mention of an auxiliary shaft being required. However, given the large recent production shortfalls that timescale will no doubt have been pushed back a couple of years at least and the investment correspondingly more difficult to rationalise even if the reserves do exist. With that crew in situ an additional red cent would be hard to justify at present.

But anyway I would join you in wishing all the rest of the long suffering bretheren here present a new year as happy as possible, and I have the feeling it could be a year of significant upheaval and restructuring at UKC. Jonson Cox has dropped enough hints that radical change is required and this could just be the radical year.

[muckshifter] 18/1/2012 16:12

Afternoon warbaby, and a belated happy new year to you (and all other shareholders reading this board).

My understanding came from the IMC independent report done for the government when there was lots of grant money flying about in 2002. They were very good detailed reports done on each of the deep mines at that time.

In terms of Daw Mill, they were quite sceptical about the future of the mine beyond 32mt.

Some of the other mines proved their point. At Rossington they said approx 3mt of reserves, UKC said 6mt & 34mt of resource. Rossington produced another 2.7mt before closure. Harworth: IMC reserves were 3.9 & resource 3.2, UKC 6.6 & 34mt, but the mine closed after 4.1mt.

So I'm a bit sceptical about the figures given in the 2010 AR, which may be a slightly optimistic view of the future, presented to keep the boys on side?
Regards.

[warbaby43] 18/1/2012 14:18

Muckshifter, don't recognise your D Mill reserves numbers at all. For recent current situation, would suggest you consult p14 of the 2010 Ann Report - 20m reserves, 2m resources and 41m mineral resources. Its geology and workforce combined have, though, before now brought UKC almost to the edge of extinction. In Q1 2010 it singlehandedly blew most of the 2009 Placement monies with the floorlift, at which point the workforce extracted by ransom from the management, the grotesque "grab-a-grand" shift rate. The only possible reason for not closing or disposing of the wretched place is critical mass.

So far as the expected update is concerned, after the general recalcitrance of the geology and workforce there, I rather suspect that the coal production figures are going to be pretty appalling and much closer to the 7.2mt of 2010 than the 8mt shareholders had every reason to expect for 2011.

Just a great pity that Harworth has not been resurrected, as if it had, then the Daw Mill problem could be disposed of once and for all.

[muckshifter] 17/1/2012 17:05

Hope everyone is braced for the next "update" which I think is due imminently.
Despite post 2694 above, claiming that a deal has been done at Daw Mill on terms and conditions, I would not be in the least surprised to see the closure of Daw Mill announced.

About nine years ago, IIRC, Daw Mill had a planned output of 3.4mt a year within the existing masterplan, which depleted the reserves to nil about mid 2010. In the ten years since then they have produced 24mt in 10 years instead of 31mt in nine years. But with the crew they have there, which has never achieved the planned 3.4mt, or its infrastucture driveage targets, in any of those years, I just can't see UKC letting it drag on to the end, with probably ever decreasing production to keep the pay rolling in for a bit longer.

Hope I'm wrong.
Regards.

[jcpete5] 03/1/2012 15:11

Not alot of good if half the board of directors are banged up for corporate manslaughter.

UKC are overstepping the mark in terms of H&S

Arguments like "It's a dangerous industry" just won't wash.

Maintain a safe working enviroment or shut down.

Simple as that

[jeffian] 03/1/2012 14:38

It's only just over a year since Jonson Cox was brought in as Executive Chairman with specific reference to his background as a 'turnaround expert'.

("The Board of UK COAL announces that Jonson Cox has been appointed Executive Chairman of the Group with effect from 15 November 2010. Accordingly, David Jones and Jon Lloyd will step down on that date from the Board and their current positions as Chairman and Chief Executive respectively of UK COAL. Jon Lloyd will stay with the Group until the end of November this year to facilitate the handover process.

Jonson Cox (54) was Group Chief Executive of Anglian Water Group ('AWG') from January 2004 until 31 March 2010, the time at which the Company entered a new regulatory cycle. He led the substantial recovery of AWG, including its subsidiaries Anglian Water, Morrison plc and AWG Property Ltd, both as a public company and after its change of ownership in December 2006. Under his leadership, AWG became highly regarded, as reflected in a three-fold increase in share price while a listed company from 2004 to 2006, Anglian Water ranking as one of the top two performing companies in Ofwat's performance assessments for each of the last three years and a successful turn-around of the Morrison businesses.")

Since then many Directors and senior managers associated with the old regime have been cleared out. I'm sure there are some residual problems but this is the man to fix them.

[jcpete5] 03/1/2012 12:58

With respect in this case H&S will take money to change-QED

The courts will not continue to give them time.

edit-do agree all this depends on latest circumstances

[kalkanite] 03/1/2012 12:28

Hi jcpete5

If you look at JC's list of priorities you will see that H & S is right at the top, this takes time to change given both human nature and infrastructure. We don't yet know the circumstances of the latest accident so I would not want to pre judge whether this is a health and safety issue or otherwise and hope that those 2 men injured recover fully.

Clearly if H & S problems continue then I too would want out, but I really believe that the will for change is there and that should have results hopefully sometime this year, no Ceo or directors would wish to preside over a company where these kind of accidents are common place.

K

[jcpete5] 03/1/2012 12:23

"Mr Justice MacDuff told Sheffield Crown Court he would not impose a penalty so high it would cripple the struggling firm."

The judge said: "These were, of course, dreadful accidents. They were preventable accidents.

Outside court, Bob Leeming, HM Inspector of Mines, said: "Fewer than 4,000 people are employed in the UK mining sector, which makes four deaths within 18 months even more stark.

"All it would have taken to prevent these deaths was better management and proper hazard control by UK Coal."

[jcpete5] 03/1/2012 11:56

ps live just down road from Daw Mill in New Arley

[jcpete5] 03/1/2012 11:53

Hi guys-UKC has a terrible H+S record.

This just another example.

Sorry if my opinion cheeses u off but I sold remaining stock this a.m.

The UK has a massive potential coal/CBM industry but this ain't the company to do it.

Just my opinion-if u disagree then demonstrate why UKC has suddenly modernised and dragged their working practices into the 21st century.

[loafofbread] 02/1/2012 12:06

Perhaps JC has seen his Daw Mill gravy train come to an end and is a little peeved? I think I read somewhere that easyjet have laid on extra flights from Poland to cope with the demand as the pig headed hard core get shown the door.
Probably more productive and a third of the price.

[muckshifter] 02/1/2012 10:49

On the face of it that looks like yet another case of cable theft gone wrong, which should not reflect badly on UKC considering that they clearly had security guards on site.

The other thing which makes "this" statement nonsense is that UKC were quite heavily fined a couple of months ago after a health and safety instigated prosecution over the deaths of three miners. The company survived, the judge took into account the company's precarious finances in deciding the penalties, and the matter received relatively little bad press. Since those three seperate instances the company has put in enormous efforts to improve H&S in what is an inherently dangerous industry - I doubt if "this" incident will turn out to be UKC's responsibility.
Regards.

[jacks13] 01/1/2012 19:25

jeffian - he's probably on about this:



It appears to involve the explosion of a surface electrical substation, or equipment therein. As the substation is reported to supply the local area as well as the site it may not belong to UK Coal, the facts are unclear at the moment.

[jeffian] 01/1/2012 13:25

What's "this"?