Wellington, Aug 26 NZPA - The price Pike River Coal Ltd sells coal to shareholders at has been endorsed by outside consultants.

MinAxis Pty Ltd found that the price payable under coal offtake contracts for the Japanese fiscal year to March 31, 2010 with shareholders Gujarat NRE Coal (NSW) Pty and Saurashtra Fuels Private Ltd had terms which are fair and reasonable to all contract parties.

The price levels reflect typical levels for contract prices settled at arms-length between major parties for internationally traded premium grade hard coking coal.

Pike River announced on July 21 that it had sold premium hard coking coal for the current Japanese fiscal year at $US128 ($NZ189.77) per tonne.

Coal sales prices agreed with Gujarat NRE Coal and Saurashtra Fuels are subject to receipt of an NZX waiver or shareholder approval.

MinAxis reviewed three contracts, including one with a major Japanese steel company and two with the shareholders.

All three signed contracts and the written sales confirmation record that a contract price of $US127.90 per tonne free on board at Lyttelton Port.

The price was a similar level as that reported settled between BHP Billiton and major North Asian steel companies for deliveries in Japanese fiscal year 2009 of Goonyella premium hard coking coal brand, which represents the international premium hard coking coal price benchmark.

The price was a premium of approximately $US8 a tonne over the price settled for standard hard coking coal grades in Japanese fiscal year.

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