Coal sales volumes of 2.8 million tonnes for the first quarter were 10% lower than 2006 levels, largely due to unplanned shutdowns and rail transportation problems associated with the harsh winter weather in British Columbia.

Higher labour costs and inflation in the costs of fuel, tyres and other consumables also contributed to cost pressures.

“Despite a difficult first quarter, the outlook for the remainder of the year remains positive," Fording president Boyd Payne said.

“Harsh winter weather led to insufficient coal railed to the ports resulting in reduced sales volumes and lower production levels. Looking ahead, we are relying on improved rail performance to move our product to the ports and I remain confident that we can meet our annual guidance targets."

Fording and Teck Cominco’s Elk Valley Coal has settled prices with approximately 90% of its customers for the coal year commencing April 1, 2007 at an average price of $US91 per tonne.