The deal, subject to trial shipments, will include low volatile pulverized coal injection (PCI) and hard coking coal, to be supplied to POSCO’s Kwangyang and Pohang steel plants in South Korea. The deal allows coal prices to be negotiated annually prior to the start of each contract year.

The coal will come from Western Canadian Coal’s Burnt River and Perry Creek in Northeast British Columbia. The company is focused on ramping up coal output to 5Mt per year within five years of its initial operations, comprising 2 Mtpa of PCI coal and 3 Mtpa of hard coking coal.

A further three trial shipments of the company’s PCI coal has been arranged with three major steel mills from Japan and also Baosteel from China. Overall, approximately 240,000 tonnes of Burnt River PCI trial shipments have been committed to the Asian steel mills.

Western Canadian Coal is also continuing discussions with a major European steel producer in connection with securing a long-term contract for the supply for WCCC’s Burnt River PCI and Perry Creek metallurgical coal. Trial shipments to this customer are expected to commence in late January 2005.

“The Company is pleased that the demand for low volatile PCI continues to grow and we are confident our planned production for calendar 2005 will be committed very soon” company president Gary Livingstone said.

Western Canadian Coal currently has more than 250Mt of coal under exploration and development planning in British Columbia.