It has also secured a contract year price of US$45/t FOB for the delivery of thermal coal to long-term customers in Japan, with effect from April 1 – a 68% increase on last year’s unofficial reference price of US$26.75/t.

“We have settled coking coal contracts with our existing customers in Asia and Europe at varying prices up to US$135/tonne for unpriced tonnage to be supplied in the 2004/05 contract year,” said Peter Coates, Chief Executive Xstrata Coal.

“These prices have been averaged with carryover tonnage that was to be delivered at last year’s prices, as a result of production constraints at Oaky Creek in 2003. As a consequence, Xstrata will achieve an average price of US$80/tonne for deliveries over the 2004/05 contract year ending March 2005. We have also achieved similar prices for our Collinsville semi hard coking coal into the Asian steel market.”

Coates said Xstrata’s average realised price for calendar year 2004 for its Queensland coking coal is expected to be in excess of US$65/tonne, including tonnage shipped and already priced against 2003/04 contracts.

“The settlements of our coking contract prices reflect the positive outlook in the medium to longer term for prime quality hard coking coals, such as the coals from our Oaky Creek and Collinsville operations, on the back of continuing growth in demand from markets such as China and India,” Coates said.

“The ongoing tightness in the thermal coal market has had a favourable effect on term prices recently negotiated for our New South Wales and Queensland thermal coal production.”