THE UK's biggest coal producer reported losses after industrial action and equipment failures left it £51.6m in the red.

UK Coal, which only weeks ago closed the North-East's last remaining deep mine at Ellington, in Northumberland, also blamed geological problems and a poor operational performance for the results, which came despite increased demand for coal.

The South Yorkshire-based company said it expected this year to be better, although the cost of flooding and redundancies at Ellington cost it more than £14m.

UK Coal said it had invested more than £8m in Ellington since 2001, much of it on equipment that could not be recovered from the flooded mine.

The cost of closure, including redundancies, will be £6m.

UK Coal, which has made bottom-line losses for the past four years, said decisive action had already been taken by new chief executive Gerry Spindler in a bid to restore profitability by next year.

The deep mines made losses of £37.8m last year, following a drop in output to 12 million tonnes from 14.8 million tonnes in 2003.

UK Coal recently informed North Yorkshire power station Drax that it would not be able to meet its supply contract in full, following geological problems at its Kellingley colliery.

The loss of Ellington Colliery, in Northumberland, and 340 mining jobs in January, signalled the end of production in what was once the largest coalfield in the world.

Operations ceased at the region's last deep mine on January 12, when 1,200 gallons of water a minute began flooding the pit's only remaining production face, six miles off the coast, beneath the North Sea. After two weeks of trying to pump out the water, UK Coal told workers the pit was closing.

Thousands of mining jobs 'not replaced'

TENS of thousands of lost mining jobs have not been replaced, according to research marking today's 20th anniversary of the end of the year-long miners' strike.

Employment in former mining areas, such as Northumberland, was still lagging ''badly'' behind other regions and many of the new jobs offered worse pay.

But the report showed job creation in the Durham area had been impressive. About 22,800 lost jobs have been replaced by 23,900 jobs in other industries.

Higher levels of ill health were found among people in former pit towns, where there were five times as many adults of working age claiming incapacity benefit rather than JobSeeker's Allowance.

Researchers at Sheffield Hallam University said there was a recovery under way, and the pace was quickening, but 90,000 coal jobs across the UK had still to be replaced.

Professor Stephen Fothergill, who led the research, said the fact that 20 years after the strike there was still a long way to go was a sad reflection on the scale of the job losses inflicted on communities.

The report said 60 per cent of coal job losses in England and Wales since the early 1980s had been replaced by new jobs.

However, the report noted that pay in the new jobs, often in call centres or the service sector, was lower than for mining.

The authors of the report concluded that the economy of the coalfields was just over half way to recovery.