Both companies settled on the re-pricing and re-phasing of the delivery of the shortfall of 750,000 tonnes of coal previously notified in UK Coal's force majeure claim.
The shortfall amount will now be delivered to Drax Power by March 2006 at prices higher than the existing contract price but lower than international coal prices.
The agreement between the two parties also provides that UK Coal will not pursue the force majeure notice.
The settlement also allows for the possibility of a limited deferral of further volumes of coal. This arrangement will be subject to a cap on the volume of coal that can be deferred, as well as a time limit for delivery. The coal would be under existing contract prices.
