Elk seals Nippon, POSCO deals

FORDING Canadian Coal Trust subsidiary Elk Valley Coal yesterday sealed a 10-year sales agreements with Nippon Steel (NSC) and POSCO for 4.85 million tonnes per annum of metallurgical coal for 2005, and increasing to 6.25Mtpa for the 2007 coal year onwards.

Staff Reporter

Trust and Elk Valley Coal president Jim Popowich said the agreements would provide sales and production stability.

In addition, subsidiaries of NSC and POSCO have each contributed $US25 million for a 2.5% limited partnership interest in a new entity, the Elkview Mine Limited Partnership (EMLP).

EMLP has acquired the Elkview metallurgical coal mine in south-east British Columbia from Elk Valley Coal Partnership (a general partnership between subsidiaries of Teck Cominco and Fording) in consideration for a 94.99% general partnership interest. A wholly owned subsidiary of Elk Valley Coal will also be a general partner and will be responsible for management of the Elkview mine.

The proceeds of the NSC and POSCO investment in EMLP will be used to increase the annual production capacity of the Elkview mine to 7Mt from its current level of 6Mt.