Coal

[mhlld]

Coal suppliers licking their chops
Billiton gets double the price it got last year on Brazil contract

Mitch Moxley, Carrie Tait and Hollie Shaw
Financial Post, with files from wire services


Friday, December 10, 2004
The good news just keeps coming for the coal industry. It's already been an incredible year, with stock prices skyrocketing nearly as fast as the price of metallurgical coal.

Then on Wednesday, the industry got more good news when BHP Billiton Mitsubishi Alliance finalized pricing into Brazil at US$125 per tonne for high-grade coking coal.

That's a 116% difference from the US$58 per tonne price BHP settled for last year.

This is a positive for Canadian coal companies, such as Teck Cominco Ltd., who has a 43.3% direct plus indirect interest in Fording Canadian Coal Trust. Fording is now negotiating 2005 contracts with steel producers.

Assuming Fording negotiates an average price of US$115 per tonne, Teck Cominco's earnings before interest and taxes would increase to about $307-million from $287-million, said John Hughes, an analyst with Desjardins. Mr. Hughes reiterated his $39 target price and "top pick" recommendation for Teck Cominco.

Teck Cominco closed yesterday $33.60, up 83 cents. The stock is up 53% year to date. Mitch Moxley

http://www.canada.com/national/nationalpost/financialpost/investing/story.html?id=7ef1dd63-965c-4f31...