UK COAL last night said the viability of some under-performing collieries was being reviewed following a disappointing year for the mining group.

The UK's biggest mining operator said that while the study would focus on ways to improve operational effectiveness, it would not involve job cuts. It did not name the sites or say if the closure of pits was being considered.

The company owns a handful of mines in the North-East and Yorkshire.

The moves come after the company reported a fall in sales volumes in the four months to the end of last month and said its deep mining operations - at eight sites following the recent closure of the Selby complex - had been disappointing. The operating performance has improved in recent weeks and new chief executive Gerry Spindler - a veteran of the mining industry in the US - has already taken steps to improve the effectiveness of equipment.

However, the company's long-term contracts meant it had yet to fully take advantage of a 40 per cent year-on-year improvement in worldwide coal prices.

Geological problems and coalface changes - where equipment is moved to a new location - have been among factors affecting output levels this year.

In a trading statement, UK Coal said: "Overall, we are disappointed with the mining performance of the company in 2004.

"We will take action to address the underlying problems in 2005 by resolving long-standing issues and by appropriate investment in collieries.

"This will allow the company to realise its full potential by returning it to profitability in 2006 and beyond."

More than 60 per cent of the coal mined in the UK is produced by Doncaster-based UK Coal at collieries or surface mine sites, principally located in the West and East Midlands, Yorkshire and the North-East.

Most of the coal is used for electricity generation, with UK power stations consuming about 53.2 million tonnes last year, the largest amount since 1996. That resulted in coal generating about one-third of Britain's electricity, with 16.8 million tonnes coming from UK Coal.

The company said it sold 4.4 million tonnes of coal in the four months to the end of October, compared with 5.7 million tonnes a year earlier.

The company also warned that it was becoming increasingly difficult to gain planning permission for surface mining in England. As a result, company equipment is likely to be under-utilised next year and could result in UK Coal making a £5m write-down on its accounts.

Another £11m provision will be taken this year if planning permission is not granted to extend a surface mine at Stobswood, Northumberland.