Wesfarmers strikes coal price deal

Wesfarmers has moved to a quarterly coal pricing system for the majority of ore produced at its Curragh mine in Queensland after achieving a 70 per cent increase to current prices.

The diversified company said it had concluded all negotiations over the metallurgical coal exports from Curragh with all major customers.

About 75 per cent of metallurgical coal produced at Curragh will now be sold at at 70 per cent above current prices through the June quarter.

The remaining 25 per cent will be sold under the annual pricing mechanism, under which a 78 per cent price increase on current prices has been negotiated.

"The company was satisfied with the result of its negotiations under the new quarterly pricing system, which resulted in improved market price relativity for Curragh's hard coking coal with price settlements for the April to June quarter at approximately US$200 per metric tonne FOB Queensland," Wesfarmers Resources managing director Stewart Butel said.

"Curragh's metallurgical coal sales volume forecast for the 2009/10 fiscal year is at the lower end of the previously stated range of 6.3 to 6.8 million tonnes, due to wet weather and rail constraints experienced in the third quarter. Current demand from customers continues to remain strong."

Shares in Wesfarmers climbed 14 cents to $32.42 at 12:38 AEST.