Glencore seals new coal deal
MINING giant Glencore has struck an agreement with Japan's Tohoku Electric Power on a supply deal for thermal coal from Australia for next 12 months.
According to sources, the companies have agreed to a price of $US109.77 ($A155) per tonne through to September 2019, with the price serving as an industry benchmark for supplies of seaborne thermal coal in Asia.
The agreed price was 16 per cent higher than the contract for the year through to September this year.
Glencore, which operates multiple coal mines in Queensland, has two annual supply contracts with Japanese utilities but talks with Tohoku Electric on supplies for April 2018 to March 2019 broke down earlier this year, forcing other utilities to set their own prices in the opaque market.
Australian spot thermal coal prices have traded around six-year highs in recent months, pushed up by a summer heatwave across the northern hemisphere as well as output cuts in China, the world's biggest consumer of coal.
Queensland Resources Council chief executive Ian Macfarlane said the market for the state's high-quality thermal coal remained strong.
"Coal is still a commodity in hot demand, and the world wants Australian coal in particular," he said.
"Figures released this week showed export earnings for Australian thermal coal are set to reach a new record high of $25 billion this financial year, and volumes are expected to climb further next year."
With annual imports of around 15 million tonnes Japan is one of the world's biggest importers of thermal coal, with its utilities buying about 40 per cent of all Australian thermal coal exports.