Pike River Coal (PRC) is bullish about coal, ahead of new international prices being set next month.

Pike coal is due to come into production from late April, and prices for that coal will be influenced by November’s talks between Australian coal producers and northern hemisphere customers.

PRC chairman John Dow said supply problems had helped push prices up. Coal exports from Australia’s east coast were being constrained by infrastructure bottlenecks particularly at Queensland’s Dalrymple Bay coal terminal.

Coal vessels faced a 16 to 20-day wait at sea to be loaded, Dow said. “Those kinds of logistics and supply bottlenecks that are driving up prices are unquestionably having a positive impact on Pike,” he said.

“It’s not just on hard-coking coal, which is the premium stuff we produce, but we’re also seeing it at the thermal coal end.”

Late last month physical coal prices for Europe broke record levels of over $US100 ($NZ136).

Macquarie Research has upgraded its 2008 premium hard-coking coal price forecast to $125 a tonne from $120 a tonne. The 2007 price was $98 a tonne, giving a 27.6% forecast rise year on year.

Dow said towards the end of each calendar year, the big hard-coking coalminers had an annual bargaining session with principal customers. Typically miners like BHP Billiton, Rio Tinto and Xstrata would meet coal buying customers, particularly from Japan, to set the price for the year ahead.

“It’s our expectation the price for Queensland premium coal, which is similar to what Pike negotiates, will be significantly upwards from the $US96 which was available this time last year,” he said. “It’s definitely having an impact on producers of high-quality, hard-coking coal.

“We’ll have about 200,000 tonnes of production in calendar 2008. And we’ll be up to full speed with one million tonnes a year from calendar 2009 onwards,” Dow said. Recently, a “significant” breakthrough had occurred in commodity prices for both hard and soft coal, partly driven by growing demand from China and India. This would likely translate into higher longer-term contract prices “likely to be around for a while”.

Dow is a former chairman and managing director of Newmont Australia and also a director of the Australasian Institute of Mining and Metallurgy.

New Zealand’s mining industry was now starting to see opportunities that were not available three or four years ago, he said. Australia’s economy was going “gangbusters” on the mining boom, which had given Australians “quality of life”.

“We need all kinds of things but getting the Government to be positive about the potential for minerals has been the hard part up until now.”

PRC’s shares traded at a 108c high the day they listed, but then fell to an 80c low on August 21, before trending back up. They closed yesterday flat at 93c.