The complex arrangement would create a partnership that would supply a fifth of the world's coking coal and become a bigger number two competitor to top-ranked BHP Billiton.

Sales for 2003 are estimated at 25 million tonnes compared with Fording's 14Mt.

Like previous offers from Sherritt International and the Ontario Teachers' Pension Plan Board, and Teck Cominco and Westshore Terminals, the new plan would create an income trust.

Under the deal, the Fording Canadian Coal Trust would own up to 65% of a partnership combining coking coal assets in British Columbia and Alberta now owned by Fording, Teck, Westshore, Consol Energy, and Luscar, a joint venture run by Sherritt and Ontario Teachers'.

Teck will contribute its coking coal assts, including the Elkview mine in southern British Columbia, and C$125 million for an initial 35% interest, which it will manage. It has the right to earn another 5% stake over a four-year period if the partnership achieves specified operating synergies, and will pay C$150 million for a 9.1% interest in the trust.

Westshore will invest C$150 million for a 9.1% stake in the trust, and sign a long-term shipping contract with the partnership for its west coast terminal.

The joint venture formed by Sherritt and Ontario Teachers' to bid for Fording will invest C$375 million for a 22.7% interest in the trust.

Consol and Luscar will contribute BC and Alberta coking coal assets and a 46.4% stake in the Neptune west coast terminal for a 13.6% stake in the partnership.

Ontario Teachers' will also exchange its stake in Fording for a 6.7% stake in the new trust.

Former Canadian Pacific executive and current Fording director Michael Granding would be chairman and chief executive of the coal partnership and president of the Fording Trust.