This sets the new hard coking coal benchmark price at US$42.75/t (FOB Australia), up from the 2000-01 reference price of US$39.75/t.

The increase will improved MIM’s profits by around $20 million while BHP is expected to improve its coking coal revenue by around US$153 million.

The price will also be boosted by the reclassification and upgrading of some lower quality coking coals which have been downgraded and discounted in recent years. Over half of semi-hard coking coals will be reclassified as premium hard coking coal, according to Japanese steel industry newsletter The Tex Report.

Suppliers of some semi-hards are believed to have won price increases of US$8/t to US$43/t, bringing their brands more in line with hard coking coal prices.

Meanwhile, the CFMEU responded to the price increase by calling for BHP to rethink its planned closure of its Cordeaux mine in early April. Limited economic reserves of Bulli seam coal and additional recovery costs are behind the decision to close the mine.

In a booming spot market, negotiators will now move on to thermal coal pricing.