Major Australian coal miners agree 44% price cut with Japan’s Chubu Electric

13 October 2009 | 04:22 Code : 18882 Geoscience events
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Miners Xstrata and Rio Tinto Ltd have sealed thermal coal contracts with Japan’s...

Miners Xstrata and Rio Tinto Ltd have sealed thermal coal contracts with Japan’s Chubu Electric for fiscal year 2009/10 at between $70-$72 a tonne, down as much as 44 percent from a year ago, coal traders familiar with the negotiations said on Tuesday.Xstrata’s (XTA: Quote) coal unit in Australia and Rio Tinto Coal (RIO.AX: Quote)(RIO.L: Quote) struck an agreement with Chubu (9502.T: Quote) early this week. Last year’s benchmark prices were set at around $125 a tonne. An Xstrata spokesmen and a Chubu official declined to comment on commercial arrangements. A Rio spokesman could not be reached.The first major price deal between big Australian coal miners and the Japanese utilities that are their main customers normally sets the tone for further negotiations for contracts that cover the April to March Japanese fiscal year, affecting power plant costs and miners’ revenues for the year. (Reporting by Fayen Wong and Osamu Tsukimori; Editing by Jonathan Leff)


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