RJB MINING, owners of the North-East's last remaining deep coal mine, refused to be drawn on the company's long-term future after revealing a big improvement in its half year results.

The UK's leading coal mining group yesterday remained tight-lipped about potential suitors, despite its announcement in June that it had received an approach from a mystery suitor which could lead to the group being taken over.

RJB, owners of closure-threatened Ellington Colliery in Northumberland, said those talks were ongoing but added that at this stage no formal offer for the group had been made.

However, speculation in the industry has mounted that privately-owned US-based conglomerate Renco is the potential buyer of the struggling coal producer.

Yesterday RJB unveiled results for the six months to June 30, which showed the company had lost £10.2m before tax, compared with a loss of £133m at the same stage last year.

But chief executive of RJB, Richard Budge refused to be drawn on talk of takeover yesterday.

He said: "Strong sales and cash flow have been achieved in the first half of the year.

"Our business continues to be cash generative and with transitional aid promised for the UK coal industry, we are well placed to exploit the increasingly optimistic trends in the world coal market."

Last year's figure included an exceptional cost of £137m in respect of the re-evaluation of its colliery assets. Turnover grew to £381.7m, up from £345.2m.

The group said coal sales had been robust in the first half with an increase in sales volumes to 12m tonnes, up from 11.4m last year, which reflected the stronger than expected demand for coal in the UK.

A fortnight ago assurances were given over the future of Ellington, as doubts grew over the eligibility of a proposed £100m Government subsidy.

European Union officials may rule that Trade Secretary Stephen Byers' planned cash input into the coal industry is unfair and anti-competitive.

The subsidy would help to ensure the viability of Ellington and 12 other pits around the country run by RJB.

The North-East pit, which employs 300, has large reserves but needs extensive work if the seams are to be mined

But EU policies are veering away from governments shoring up ailing industries with bulk cash backing, and speculation has arisen that clearance may be blocked for the proposed subsidy.

Following a recent visit by Blyth MP Ronnie Campbell to discuss the issue with EU officials in Brussels, he was assured the subsidy would not be outlawed.

But industry insiders believe the possible take-over of RJB may be hindered in the wake of the fears that the subsidy may not win EU approval.