Principal Risks and Uncertainties

UK COAL PLC operates in an industry which carries inherent risk, and is subject to market and other external risks which cannot be fully controlled, mitigated or insured against.

The principal risks and uncertainties identified by the Directors which exist within the Group remain those disclosed in the Annual Report and Accounts for the Group for the year ended 31 December 2007. The key risks fall into the following categories:

Mining risks:

• Health, safety and environment
• Major unforeseeable production shortfalls or geological constraints
• Fluctuations in coal prices

Property risks:

• Property market downturn or volatility
• Planning approvals

The Outlook section of the Chairman’s statement provides commentary concerning the remainder of the financial year.