New World Resources (NWR), Central Europe’s leading producing of hard coal and coke which largely supplies the steel industry, announced strong demand and sharply increased prices for its products going into the second quarter of the year.
Average prices agreed for coking coal to be delivered in the second quarter climbed 35 percent from the first quarter to €215 a tonne with coke up 19 percent to an average €400 a tonne. Czech-based Brokerage Atlantik FT said the price rises exceeded its expectations.
The company, which is largely based on the Czech OKD mines in the east of the country, said it will immediately shift to pricing all of its coking coke quarterly instead of annually so that it can better track the strong demand and rising prices for the commodity. In the first quarter, NWR’s coal and coke sales were almost matched by production. ‘Our issue is getting coal out of the ground fast enough to supply our large customers.’
“Our issue is getting coal out of the ground fast enough to supply our large customers,” NWR Chief Financial Officer Marek Jelínek told journalists in a conference call Monday morning, adding that sales are ahead of the company’s targets for the year.
Jelínek said that there was strong world demand for the coal and coke used in steel production, with European steelmakers working at or near 100 percent of their capacity. The Japanese earthquake and tsunami would have some upward impact on coking coal prices, presumably by boosted steel demand for reconstruction, he added.
Looking to London
NWR also outlined the conditions for a shareholder proposal to reincorporate the parent company in Britain instead of its existing base in the Netherlands in a bid to get the share included in the London Stock Exchange’s FTSE 250 index, a move which should boost the company’s image and boost share trading.
The proposal from the board to create a new company, New World Resources PLC, and exchange one old share per new share will have to be backed by 95 percent of shareholders, though in some specific circumstances backing from 75 percent would be sufficient. The biggest single shareholder, BXR Mining with a 63.6 percent stake — one of whose main owners is the Czech businessman Zdeněk Bakala — has already said it is willing to vote for the change as long as 80 percent of all shareholders back it.
NWR is seeking to submit its FTSE 250 listing bid in June and inclusion on the FTSE 250 soon afterwards. Its shares are already traded on the London, Prague and Warsaw stock exchanges. Jelínek had said earlier that the ongoing process to reincorporate NWR as a UK plc. would not result in moving NWR’s headquarters, and the company would continue to be taxpayers in the Netherlands.
See related article: Coal miner NWR’s Q4 profit jumps, sees demand rising
