Wesfarmers’ resources division has won a 53% price rise for its coking coal exports for the June quarter.
The company told the ASX yesterday that the price for the June quarter will be $US328 a tonne, compared to the $US221 a tonne for the previous quarter.
Wesfarmers said that "weighted average US$FOB for new contract prices of Curragh metallurgical coal (hard coking, semi-hard coking and PCI) will increase by approximately 53 per cent as compared to the January 2011 to March 2011 quarter prices.
"All of Curragh’s contracted tonnage for this quarter has moved to a quarterly pricing mechanism."
The company said that around half of the April to June 2011 quarter sales tonnage is forecast to be at the new contract prices.
“As previously stated, recent severe flooding has significantly impacted Curragh’s metallurgical coal production for the January 2011 to March 2011 quarter with further heavy rainfall occurring throughout March."
The company said that Curragh’s coking coal sales volume is now forecast to be at the lower end of the range of 5.8 to 6.2 million tonnes for the 2011 financial year, "subject to no further significant wet weather and satisfactory rail and port operations".
"It is anticipated that force majeure will be lifted for all export contracts in early April,” Mr Butel said.
Last August Curragh had been looking for sales of around 7 million, so the impact of the rain and disruption on this mine alone is substantial.
The price settlement is in line with the $US330/tonne agreed by Anglo American for its Queensland coking coal last month.
Late last week Xstrata won a 30% price rise to around $US128 a tonne for its Australian thermal coal exports to Japan for the 2011-12 Japanese financial year.
Wesfarmers is the only major Australian-owned coal exporter to release its quarterly export prices.
BHP Billion and Rio Tinto are far more circumspect.
Wesfarmers shares rose 33c to $32.78 yesterday.
In other news yesterday the promised redundancy program at QR National is getting underway as promised in last year’s offer documents and there seems to be no shortage of employees wanting to leave.
The company said yesterday that 600 workers – more than 6% of employees – will start leaving as early as next week after a strong response to its voluntary redundancy program.
The company said that it would start the retrenchments from April 15, pending the final round of talks with unions about the redundancy program.
The majority of those leaving from its 9400-strong workforce will be from its head office and freight business.
Shares in QR National rose to an intraday high of $3.53 yesterday before settling up 3c at $3.45, the highest level since it listed on the ASX on November 22.
QR National estimated that the lay offs will cost it a total cash outlay of $75 million, which includes the payment of leave entitlements.
It will see the company take a $50 million hit to its pre-tax earnings this financial year.
Earnings have already been adversely impacted by the flooding and mine closures earlier this year, as well as the disruptions to QR National’s rail operations.
The company said that 60 other workers have already left this financial year.
QR National said it had received interest in the redundancy program from more than 920 workers.
The company also indicated that more redundancies were likely from a looming restructure of its operations.
Those workers leaving QR National from next week will receive a redundancy payment of three weeks pay for each year worked, capped at a maximum of 104 weeks’ pay.
Santos said yesterday that it had made a gas discovery in Western Australia’s Carnarvon Basin, southwest of Chevron’s Gorgon-1 gas field.
Santos said the Zola-1 exploration well in the WA-290-P permit had intersected more than 100 metres of net gas pay sands over a 400 metre gross interval.
The Zola-1 well is located 27 kilometres southwest of Gorgon-1, with a water depth at location of 280 metres. The discovery is on trend with the Gorgon gas field and is situated near existing and developing gas infrastructure.
Trevor Brown, Santos vice president exploration and subsurface, said in the statement the company would be working with partners to quickly appraise the discovery.
Santos holds a 24.75% interest in the well, US group Apache (operator) holds 30.25%, OMV Australia 20% of Austria, Nippon Oil Exploration 15% and Tap Oil 10% (Australia).
"Zola is in a terrific location and is a significant gas discovery," Mr Brown said in a statement on Monday.
Santos vice president for WA and Northern Territory, John Anderson, said the company would commence talks with partners on development options for the discovery.
Zola-1 is 27km southwest of Gorgon-1 and is near existing and developing gas infrastructure.
Shares in Santos were up 10c at $16.05.
