Regional Coal: Wesfarmers concludes Jan-March coal price negotiation

Australian coal firm Wesfarmers Resources said on Tuesday that the price negotiations for the January 2011 to March 2011 quarter for metallurgical coal exports from its Curragh mine in Queensland?s Bowen Basin have now been concluded with the majority of customers.

Wesfarmers? managing director, Stewart Butel, said the company is satisfied with the result of its negotiations for Curragh?s hard coking coal, with price settlements for the January 2011 to March 2011 quarter at approximately US$221 per metric tonne FOB Queensland.

As previously stated, approximately 75 percent of Curragh?s contracted tonnage has moved to a quarterly pricing mechanism. For the January 2011 to March 2011 quarter, the weighted average US$FOB for new contract prices of Curragh metallurgical coal (hard coking, semi-hard coking and PCI) will increase by approximately 12 per cent as compared to the October 2010 to December 2010 quarter prices.

Recent severe flooding in Central Queensland is significantly impacting Curragh?s metallurgical coal production and QR National?s Blackwater line with rail operations on this line not expected to resume before mid January 2011 at the earliest. Force majeure remains in place for export and domestic contracts, Butet said.

?As advised on 4 January 2011, Curragh?s metallurgical coal sales volume is now forecast to be in the range of 5.8 to 6.2 million tonnes for the 2011 financial year, subject to no further significant wet weather and satisfactory rail and port operations. This compares to a pre-flood forecast of 6.0 to 6.5 million tonnes.? (denny)