UK Coal struggling after £125m loss

The UK's biggest coal producer has admitted to "deep-rooted problems" after it recorded losses of more than £100m for the second year in a row.

UK Coal, which has three deep mines in the Midlands and Yorkshire and employs nearly 3,000 people, has already made £12m savings through pay and head-office cuts while it works on a full strategic plan that it hopes will identify a viable business model.

In a stark assessment, the new chairman Jonson Cox said production levels were consistently short of expectations, while costs have grown "relentlessly" with labour costs per employee up to £61,000 from £44,000 in 2006.

It reported pre-tax losses of £125m for last year, following on from £129m in 2009 and £15.6m the year before.