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The deal covers the transport of metallurgical coal from its Elk Valley Coal operation in south-east British Columbia to Vancouver ports.
The exact terms of the contract were not revealed but CPR did commit to increasing base volumes of coal moved to be in line with the Fording’s current planned increases in capacity.
“CPR’s commitment to increase coal movements during the term of the contract provides us with the confidence that Elk Valley Coal will have sufficient rail capacity for its current expansion plans, and will have the flexibility in future years to consider further production increases,” Fording president Jim Popowich said.
“The new contract also provides us with more certainty in our rail costs.”
Under the new contract, Elk Valley’s 2005 calendar year transportation and other costs will average approximately $C37-38/t compared with $C29/t in 2004.
Both parties have also agreed to drop all legal and regulatory proceedings in a previous contract dispute.
