Amsterdam (21 July 2010) New World Resources N.V. (“NWR” or the “Company”), Central Europe’s leading hard coal and coke producer, today announced that it has reached agreements with its customers for coking coal and coke sales for the third calendar quarter of 2010.
Quarterly priced coking coal, which represents 20% of the total expected sales volume for 2010, amounts to approximately 300kt for delivery in the third calendar quarter of 2010 and comprises mostly semi-soft coking coal. The average price agreed for these deliveries was EUR 158 per tonne, 17% higher than the average price for the second calendar quarter of 2010.
The average price agreed for coke sales during the third calendar quarter of 2010 was EUR 362 per tonne, an increase of 42% compared to second calendar quarter prices and 143% higher than the 2009 average price. The expected sales volume for the period is approximately 250kt.
As previously announced, 80% of NWR’s coking coal in terms of tonnage is sold on a Japanese Fiscal Year (“JFY”) basis, all coke is sold on a quarterly basis and all thermal coal prices are agreed for the calendar year. The price for JFY 2010 coking coal sales and thermal coal prices for the calendar year 2010 remain unchanged at an average of EUR 163 per tonne and EUR 65 per tonne, respectively.
“The coking coal and coke prices we have agreed for the third calendar quarter of 2010 are encouraging and are evidence of the continued solid demand for our products this year,” commented Mike Salamon, Executive Chairman of NWR’s Board. “We are happy with our current sales structure, thanks to our decision to settle 80% of our coking coal sales volumes for JFY 2010. However, given the continued uncertainty regarding the prospects for the steel industry, we remain cautious about predicting the outcome of future pricing negotiations as they will be driven by the market dynamics at the time,” added Mr. Salamon.
During calendar year 2010, NWR expects to sell externally a total of approximately 5.5Mt of coking coal, 5Mt of thermal coal and 1.1Mt of coke. Production targets for calendar year 2010 remain unchanged at 11.5Mt of coal and 1Mt of coke.
All of the prices stated in Euros are based on an exchange rate of CZK/EUR of 24.50. Prices are expressed as blended averages between the different qualities both for coal and coke and are ex works (EXW).
NWR further notes that the average prices announced are indicative prices, as these can be influenced by a range of factors including, but not limited to, exchange rate fluctuations, quality mix, timing of the deliveries and flexible provisions in the individual agreements. Thus the actual realised price for the period may differ from the average prices announced.
The Company will publish its results for the six-month period ended 30 June 2010 on 26 August 2010, at which further details of the Company’s performance will be announced.
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For further information please contact:
New World Resources N.V.
Tel: +31 20 570 2270
Tel: +31 65 476 4119
Disclaimer and Cautionary Note on Forward Looking Statements and Notes on Certain Other Matters
Certain statements in this document are not historical facts and are or are deemed to be “forward-looking”. The Company’s prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; “may”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “will”, “could”, “may”, “might”, “believe” or “continue” or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond NWR’s ability to control or predict. Forward-looking statements are not guarantees of future performances.
Factors, risk and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: risks relating to changes in political, economic and social conditions in the Czech Republic, Poland and the CEE region; future prices and demand for the Company's products, and demand for the Company's customers' products; coal mine reserves; remaining life of the Company's mines; coal production; trends in the coal industry and domestic and international coal market conditions; risks in coal mining operations; future expansion plans and capital expenditures; the Company's relationship with, and conditions affecting, the Company's customers; competition; railroad and other transportation performance and costs; availability of specialist and qualified workers; and weather conditions or catastrophic damage; risks relating to Czech or Polish law, regulations and taxation, including laws, regulations, decrees and decisions governing the coal mining industry, the environment and currency and exchange controls relating to Czech and Polish entities and their official interpretation by governmental and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are as described in the Company’s annual report.
Forward-looking statements are made only as of the date of this document. The Company expressly disclaims any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-looking statement contained in this report to reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by applicable law.
21 Jul 2010 Update on prices for the third calendar quarter 2010 (319KB PDF)