COAL miner ATH Resources has re-negotiated a ‘legacy’ contract, allowing it to sell coal at higher prices.
The Doncaster-based surface mining group said under the new terms of the contract “there will be an increase in the selling price for higher quality coal which will enhance both earnings and cash”. The new terms apply from January 2.
ATH is working through older contracts which tie it in to selling coal at lower than current market prices. These legacy contracts make up about 32 per cent of its sales, and continue to hamper its financial performance.
The first of its legacy contracts falls away at the end of March 2012, and the second in 2013, meaning average selling prices will continue to improve.
The company recently reported a £5.8m annual loss as high fuel costs and tough geology squeezed margins. It sold 1.67m tonnes of coal in the year to the start of October, seven per cent less than a year earlier. Revenues increased seven per cent to £84.2m from £78.3m, as ATH’s selling price rose 15 per cent to £50.43 a tonne.