Australias Excel secures new thermal coal dealsadmin
Australia’s Excel Coal Ltd. , said it had agreed contracts to supply thermal coal to Europe at an average price of $51 per tonne, a price signal for deadlocked talks between producers and Japanese buyers.
Shares in Excel, which sells most of its thermal coal to Japan, rose 5.9 percent to A$7.73 in an overall market up 2.2 percent.
Excel, Australia’s second-biggest independent coal producer, will supply 3.6 million tonnes of thermal coal from its Hunter Valley mines in New South Wales, netting $184 million in deals covering a three-year period for supplies sold free-on-board out of Newcastle port from January 2007.
Australia is the world’s second-biggest exporter of thermal coal after Indonesia, and producers have been locked in lengthy negotiations with Japanese power companies on benchmark pricing contracts for the Japanese fiscal year, which began in April.
Prices for the previous fiscal year were settled between $52 and $54 a tonne, and analysts say the Japanese may be unsuccessful in negotiating cheaper deals, which set a global standard, given sustained recent strength in spot prices.
Excel said it had hedged its foreign exchange exposure on the deal, securing a fixed price of around A$70 per tonne.–(Reuters)