A review of the contract price of Bullmoose coal for the period commencing April 1, 1989, has lowered the price to $88.26 per tonne. The Bullmoose mine in northeastern British Columbia is owned 61% by Teck ST (TSE), 29% by Rio Algom (TSE) and 10% by Nissho Iwai Coal. The new price represents almost a 10% drop from the previous contract price of $97.87 per tonne.
Although coal producers are notorious for keeping their operating costs a secret, Keith Steeves, vice-president of marketing, said the mine could continue to operate at a profit at the new price.
He noted the price was subject to increases each quarter according to an escalation formula tied to certain Statistics Canada figures. The next price review is set to take place before April 1, 1993.
The viability of the nearby Quintette mine was put into question last year when negotiations lowered the contract price of coal to $82.40 per tonne. Quintette said the price is below its operating cost and the company is now seeking major concessions from its lenders.
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