Tuesday, June 3, 2008

Pike River Coal To Sell For $US300 Per Tonne

Pike River Coal Ltd said it will get $US300 ($NZ387) per tonne for the coal produced from its new mine on the west coast of New Zealand’s South Island . The price the mine will sell its first coal production is up from around $US98 a tonne prevailing a year ago in the market, according to media reports of coal negotiations.

"We are pleased to sell our first coal at record prices which are in line with price settlements announced by Australia's major hard coking coal producers for their premium quality hard coking coal," Pike River chief executive Gordon Ward said.

Pike said the price for its premium hard coking coal has been settled with two Japanese steel mills and its Indian shareholders Gujarat NRE Coke Ltd and Saurashtra Fuels Private Ltd for the year to Match 31, 2009. Mr Ward said analysts were currently predicting a price in a range of $US270 to $US300 beyond that.

Pike is yet to start production. The owners expect to hit the coal seam in July but the mine will not be in full production until a year later. Pike expects to produce about 200,000 tonnes in the year to June 2009. The contract price announced today applies to March and the mine produces quite a lot of the annual predicted output in the three months to June.

Its Indian customers are expected to take 55 percent of the mine's production.

Ultimately the mine expects to send 1.3 million tonnes a year of coal on rail to Christchurch for export.

Soure: NZPA via Guide2.co.uk

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