MORE THAN 200 PERCENT PRICE INCREASES
Coal miners are set for a windfall this year, as initial benchmark negotiation results indicate that coal prices are likely to double or triple in some instances.
The writing had been on the wall as early as January this year when coal, long considered an inexhaustible, cheap and dependable source of energy, suddenly found itself in a vicious circle of tight supply and high demand that sent its prices to new highs.
As results from the annual process to set benchmark coal prices began trickling in this week, a dark cloud hung over steelmakers and electricity generators with indications pointing to the fact that they would be forced to pay far more for the commodity.
Nevertheless for the coal miners, the 2008 financial year looked promising and bountiful, amid expectations that they would rake in more returns from mining the dirty commodity. Most coal is traded under annual contracts and the currently round of negotiations have been ongoing for several months.
First to send shock waves through the coal market was an agreement reached between the South Korean steelmaker POSCO and Australian miners BHP Billiton and Rio Tinto Monday that hiked the prices of coking coal by 205 to 210%, thereby pushing them from US$98 (last year's price) to over US$308 a ton this year....MORE