UK Coal said the losses it posted in the first quarter were in line with its forecasts, but warned of problems at its only colliery in the West Midlands.

Deep mine production in the quarter at UK Coal's seven ongoing mines was 2.1 million tonnes from 2.0 million the previous year, while surface mine output was 0.3 million tonnes against 0.6 million.

Chairman David Jones told the company's AGM the deep mine business saw "some improvement" in the quarter, but this was offset by a production shortfall at the Harworth colliery in South Yorkshire, where excess methane caused production to be halted for a time in January and February.

Mr Jones said the second quarter would be hit by an unanticipated face gap at Daw Mill in Warwickshire, but this should be offset by price increases and overall improved performance.