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Solid Energy export coal prices up 50% to US$200/t; Spring Creek output likely to rise to 600,000/t this year
10 May 2010 - Solid Energy has negotiated a 50 per cent rise in export coking coal prices to around US$200 a tonne (about NZ$274 a tonne) in line with recent international coal price trends.
Sources: Solid Energy and Lindsay Clark
The manager for Solid Energy’s international exports Simon Doig, said from Christchurch that coking coal export contracts which are renewed in April - about half of the company’s contracts - were being sold at the higher price.
He said Solid Energy’s April contracts had also moved to the quarterly pricing regime now being adopted by world coal exporters.
This matches the industry trend-setting agreement made in March between BHP Billiton the world’s largest miner, and JFE Steel of Japan. The quarterly April to June contract was a break with decades of tradition for the coal and steel industries under which contracts were agreed annually.
Mr Doig said that discussions would soon begin on Solid Energy’s remaining contracts which are due for renewal from July 2010. Demand was growing stronger particularly from China and recently spot coking coal prices had risen to US$230-$260 a tonne.
Mr Doig said the price for semi-soft coking coal had risen in April to US$165 million a tonne (about NZ$226 a tonne), about 75% higher than last year’s semi-soft price of around US$90 a tonne.
He also said that the Spring Creek export underground coal mine just north of Greymouth is expected to lift production to about 600,000 tonnes in the year to the end of June. Mr Doig said Spring Creek production would have been higher still for this year had it not been for the industrial dispute before Christmas and the redesign of one of the mine’s coal panels.
Spring Creek’s biggest annual production to date was 400,000 tonnes last year.
Solid Energy owns 51% of Spring Creek in a joint venture with international trading firm Cargill. The mine exports semi-soft coking coal.
