Quintette ruling threatens company McConkey claims

Quintette Coal Chairman Bruce McConkey has asked the British Columbia Court of Appeal to overturn a Supreme Court judgment relating to prices paid for its product by the company’s Japanese customers. McConkey said the appeal was filed to protect the interests of Quintette, its employees, its suppliers, its lender and others who have a stake in the northeast British Columbia coal operation.

The issue was sent to arbitration in 1987 when Quintette and two Japanese buyers with a 15-year contract to take 1.3 million tonnes annually couldn’t reach a pricing agreement.

Under the original long-term contracts, the price at April 1, 1987, would have been $103.80 per tonne, rising to approximately $112 per tonne by the beginning of next year.

However, on May 28 the arbitration panel set the rice to be paid by Quintette’s Japanese customers at $95.30 per tonne on April 1, 1987, to about $82.40 per tonne starting on Jan. 1, 1991.

“The prices set by the arbitration panel are below the cost of producing and delivering coal and threaten the existence of the company,” said McConkey.

“We have a responsibility to everyone who depends on Quintette for their livelihood to set aside the arbitration award and obtain a price settlement that will better enable Quintette to continue as a viable operation,” he said.

While Quintette is 50% owned by Denison Mines (TSE), the latter company is not liable for the coal miner’s debt.