Aquila subsidiary IP Coal and Vale have not been able to agree on how to market coal from the Isaac Plains mine since November 2010, when an arrangement where Vale took responsibility for marketing ended.

“If these issues cannot be quickly resolved and stockpile limits are reached, this situation will adversely affect operations at Isaac Plains and IP Coal's sales of its 50% share of coal from Isaac Plains,” Aquila executive chairman Tony Poli said in a statement today.

“On Friday, a customer of IP Coal cancelled one shipment of coal.

“The size of any adverse effect on IP Coal cannot be determined at this stage and is dependent on the outcome of the discussions between Vale and IP Coal, the extent to which these issues remain unresolved and whether IP Coal continues to be prevented from being able to separately sell its 50% share of coal produced at Isaac Plains.”

Since November Vale and IP Coal have both assumed marketing responsibility for their 50% share of product from Isaac Plains.

A number of joint sales, where those sales were arranged prior to the previous marketing arrangement coming to an end, and individual sales have been completed.

IP Coal is seeking to progress the discussions and is considering what remedies may be available to it, including in respect of any losses it may suffer, it said yesterday.

Aquila’s share price was down by 3.92% to $7.85 this morning.