Japan annual coal talks to resume this week after quake delay

Mar 21, 2011 |Reuters

Annual negotiations between Japanese utilities and Australian coal producers for thermal coal contracts starting Apr 1 are expected to resume this week after being delayed by the deadly quake that hit Japan earlier this month.

The contract price will still likely settle around $130 a tonne, exceeding the record of $125 seen in 2008, traders and analysts said.

The annual contract prices are set by mining major Xstrata Coal, the world's largest exporter of power-station coal and large Japanese utilities including Tokyo Electric Power Co (TEPCO), Tohoku Electric Power Co Inc and Chubu Electric, both of whom declared force majeure on coal deliveries last week.

One source said Kyushu Electric Power may also team up with Chugoku to negotiate for the contract.

Prior to the quake, trade sources had said that bids and offers stood about $10 apart, with Xstrata said to be offering a price of $140 per tonne and Japanese utilities countering with a $130 bid.

Tags :Xstrata, Tokyo Electric Power Co, Tohoku Electric Power Co Inc and Chubu Electric., force majeure,