The largest coal mining company in Britain, UK Coal has said that it has received a £350 million merger proposal from an unnamed entity. The Coal major wants to reduce its dependence on the coal mines which have caused huge losses for the firm.

UK coal said that it wants to reduce it exposure in "the volatile performance of its deep mines". The miner said has that the merger proposal is not from any of its existing shareholders. The Peel Group, which owns 28% of UK Coal has been informed of the developments. Both the companies have did not comment last night.

The shares of UK coal rose 12.4 per cent after the announcement to close at 59p today. Its shares have dropped around 30 per cent this year as investors are worried over the performance of its deep mines.

Some of the deep mines owned by the company includes in Yorkshire and Thoresby and Welbeck in Nottinghamshire. The also announced decision to delay works on a new face at Daw Mill near Coventry to some times in April from around end of March

The company has said that its management is concerned over the volatilities of the deep mines and it wants to mitigate its effects by operating or structural improvements. The company is valued £175 million down from almost £1billion last year.