Vancouver – It looks like more northeastern B.C. coal will be heading to South Korea to fire that country’s steel industry. In the latest deal, Western Canadian Coal (WTN-V) arranged a six-year purchase and sale agreement with POSCO, a highly profitable steel producer.
Under the contract, for which prices will be negotiated yearly, Western Canadian will supply three million tonnes of pulverized injection coal (PCI) and coking coal from its Burnt River and Perry Creek properties near Tumbler Ridge over six years.
Coal prices have been on a tear over the past year driven by China’s thirst for construction material.
The company has unloaded two trains at Ridley Terminals in Prince Rupert as part of a trial shipment destined for POSCO’s Kwangyang and Pohang steel plants in South Korea in early January.
The company also secured 240,000 tonnes of Burnt River PCI coal as trial shipments for three major steel mills in Japan and Baosteel from China.
Western Canadian says it is still in talks towards a long-term contract with a major European steel producer that is eyeing the company’s PCI and metallurgical coal.
News of the long term contract sent the company’s shares up over 6% on triple its average share volume. The shares closed at $6.47 on Dec.16. Only a year ago, Western Canadian Coal’s share price was sitting at a mere fraction of that (52).
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