Bloomberg News

Anglo Settles Coking Coal Contracts With Asian Mills, UBS Says

June 21, 2011

June 21 (Bloomberg) -- Asian steelmakers agreed to pay Anglo American Plc $315 a metric ton for hard coking coal in the September quarter after first rejecting the offer as too high, according to UBS AG.

“This sudden deal reflects new concern over supply,” UBS analysts led by Sydney-based Tom Price said in a note yesterday, citing strike action at mines operated by BHP Billiton Mitsubishi Alliance. UBS didn’t say where it got the information. Jacqui Strambi, a spokeswoman for Anglo, didn’t immediately return a voicemail left at her office.

Steelmaking-coal prices rose 47 percent to a record $330 a ton for three-month contracts starting April 1 after heavy rain and flooding in Australia shut mines and curbed output from the world’s biggest exporter of the commodity. Rio Tinto Group, Xstrata Plc and BHP Billiton Ltd. were among companies that notified customers they would miss deliveries after the floods.

Stoppages at BHP’s mines in Queensland took place across three days, commencing at the Saraji and Norwich Park mines on June 14, then the Gregory, Crinum and Blackwater mines on June 15 and the Goonyella Riverside and Peak Downs mines June 18.

Australia is the biggest shipper of coking coal and the second-largest exporter of thermal coal for power stations, after Indonesia.

--Editors: Jane, Ching Shen Lee, Paul Gordon

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net


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