The deal, for the period April 2005-March 2006, is destined for Asia and includes a small volume of coking coal. The weighted average price for the coal is over $US103 per tonne.

 

The initial 655,000t is part of a total 2.1 million tonnes Pine Valley has contracted to deliver to Asian customers over multi-year terms of up to five years.

 

The company said the coal is being sold under agreements typical for the industry including annual price negotiations.

 

Sales negotiations for the remaining output are continuing. The company anticipates producing approximately 1.2Mt of PCI coal and 35,000t of coking coal during the year beginning April 2005.

 

The company said its sales for this year were to include 243,000t of carry-over tonnage at 2004 contracted pricing which was around $US52/t. The late start-up of the coal handling facilities at Willow Creek and poor rail performance were the reasons for this.

 

“The company has had detailed discussions with CN Rail regarding CN's ability to perform pursuant to its contract with the Company and to deliver the rail capacity necessary to meet expected shipment volumes,” Pine Valley said.

 

Additional locomotives and sets of cars are being added to meet the company's forecast shipments.