Overnight Coal

· Arch Coal (ACI) bids $86 million for Montana-owned Otter Creek coal tracts. ACI placed a bid of $86 million plus future royalties for the right to mine a half-billion tons of state-owned coal in southeastern Montana near the Wyoming border. It already controls 731 million tons of coal in Otter Creek. Developing a mine in the region will require extra effort because of lack of required infrastructure, and will also require construction of the proposed Tongue River Railroad — a project fiercely fought by environmentalists and area landowners. (Source: BusinessWeek)
· PCI contract prices this year almost double of last year. Macarthur Coal said it has started agreeing prices for its pulverized, or PCI, coal at levels in line with other contracts being signed. Other miners have signed contracts in range of between US$170 and US$180 a tonne, double the US$90 a tonne seen last year. The company also said that the recent settlements have seen a shift from annual pricing resets to quarterly and half yearly resets. (Source: Dow Jones)
· China’s next coal consolidation target, Inner Mongolia. The Economic Committee of Inner Mongolia Autonomous Region said that it plans to control coal output at 700 million tons in 2010. The region produced 637 million tons of coal last year, up 171.88 million tons or 37% from a year ago. The production constrain is part of the government's effort to optimize the structure of the coal industry and promote the technological upgrade. (Source: Bloomberg)
· China's iron ore negotiations progressing on all fronts. Rio's iron ore negotiators to go on trial next week, as this year's price negotiations advance and just as CEO Albanese visits Beijing to rebuild relationships. (Source: Wall Street Journal; page A12)
· When is a carbon credit not a carbon credit? When its a used carbon credit of course. Carbon prices fell from €12 to €1 in Europe after it was discovered that some carbon trading on the Hungarian market was using credits that had been used before. This is said to highlight the complexity of these markets. (Source: The London Times)