(The following story by John D. Boyd appeared on The Journal of Commerce website on October 7, 2010.)
WASHINGTON, D.C. — Canadian Pacific Railway and Teck Resources, its largest coal shipper, agreed to terms on a 10-year deal for CP to carry Teck’s metallurgical coal to export terminals.
The parties did not give details of the confidential accord that takes effect next April 1.
“This agreement gives Teck the certainty we need to realize our growth strategy in coal and to deliver our increased production on a timely basis to our key markets,” said Don Lindsay, Teck president and CEO.
CP will haul the coal, which is used overseas to heat steelmaking furnaces, from five mines in southeast British Columbia to ports around Vancouver.
The companies said they will “work together to achieve growth in the volume of coal shipped through a range of economic and marketplace dynamics.” Their deal “provides for investments by CP that enhance coal handling capacity to provide for Teck’s volume growth.”
Fred Green, president and CEO of the rail company, said the accord is “a unique and collaborative agreement that sets the foundation for the next decade. Our ongoing dialogue has provided new and deeper insight into Teck’s growth objectives. Importantly, the agreement provides the stability and confidence to grow our business and enhance this world class supply chain for our mutual benefit.”
Stock investors responded favorably, pushing up the price of CP shares by 1.5 percent Oct. 7, on a day when many rail stocks either fell back or rose slightly.