In its interim report for the first six months of the year, UK Coal says a 45% rise in the market price of coal since the start of the year would mean an annual of about £70m.

And the development to extend the life of Thoresby is 'progressing well and on target for production from new reserves in line with expectations of late 2009'.

The report adds that Thoresby had a good first half of 2008, producing 0.3m tonnes, as it is 'working its way through some very difficult coal until it can reach its new reserves'.

However, Welbeck Colliery - which is due to close in the next 18 months - is reported to have had a 'slightly disappointing first half of the year' as production fell from 0.6m tonnes in 2007 to 0.4m. This was due to a delay in starting work on a new face following the death of a miner at Welbeck in November last year.

UK Coal has also started tests on the viability of re-opening Harworth pit - which could potentially be the biggest single colliery in Europe in terms of reserves - with a decision expected next year on the pit mothballed after closing in December 2006.

UK Coal's chief executive John Lloyd said: "We need to prove that coal (at Harworth) is of the quality we believe it to be and it is workable and accessible."

The company is Britain's biggest producer of coal, supplying about 15% of all the coal burned - equivalent to the energy needed to provide 5% of the country's electricity needs - and revenue si up 18%..

The average sale price in the first half of the year rose by 18% to £1.79 per gigajoule, but UK Coal said some production sold on the open market for up to £4.

However, losses for the half year were £9.9m against profits of £40.6m in the same period in 2007.