Elk Valley Coal Partnership

Elk Valley Coal Partnership

April 05, 2005 23:59 ET

Elk Valley Coal and CPR reach five-year agreement

Contract Provides Commitment for Capacity Expansion

CALGARY--(CCNMatthews - April 5) - Fording Canadian Coal Trust (TSX: FDG.UN,
NYSE: FDG) and Teck Cominco Limited (TSX: TEK.MV.A, TEK.SV.B) today announced
that Elk Valley Coal Corporation and Canadian Pacific Railway Company (CPR) have
reached a five-year agreement for the transportation of metallurgical coal from
Elk Valley Coal's mines in southeastern British Columbia to Vancouver area ports
for export. The exact terms of the contract are confidential.

"We are very pleased to have finalized this agreement with Canadian Pacific,"
said Jim Popowich, CEO of Elk Valley Coal and President of Fording Canadian Coal
Trust. "CPR's commitment to increase coal movements during the term of the
contract provides us with the confidence that Elk Valley Coal will have
sufficient rail capacity for its current expansion plans, and will have the
flexibility in future years to consider further production increases. The new
contract also provides us with more certainty in our rail costs. We believe this
is a good contract for both parties and look forward to strengthening the
relationship between the two companies and capturing opportunities in our coal

The key elements of the confidential contract are:

- a five-year agreement effective April 1, 2004 to March 31, 2009;

- a commitment from CPR to increase the base volumes of coal to be moved in
line with Elk Valley Coal's current planned capacity increases;

- a framework with CPR to transport additional tonnes above the base volume
during the 2006 to 2008 coal years, with a rate premium on the additional

- fixed rates for the first three years of the contract, with the 2004 coal
year rate being approximately 20% higher, and the 2005 and 2006 rates in the
order of 60% higher, than the 2003 rate;

- rates for the 2007 and 2008 coal years that will be linked to Elk Valley
Coal's sales price of coal, subject to a floor and ceiling rate, both of which
will be lower than both the 2005 and 2006 but higher than the 2004 contract rail
rates; and

- a fuel cost adjustment mechanism for the last two years of the contract.

In addition, the parties resolved a number of other operating and commercial
issues. In connection with this agreement, Elk Valley Coal and CPR have agreed
to discontinue all legal and regulatory proceedings relating to their previous
contract dispute over the transportation of coal.

As a consequence of the new contract, Fording is updating previous information
concerning transportation and other costs as provided in its news release dated
December 14, 2004. On the basis of expected coal prices for 2005 and the new
rail contract, Fording anticipates that Elk Valley Coal's 2005 calendar year
transportation and other costs will average approximately $37 to $38 per tonne
compared with $29 per tonne in 2004. Transportation and other costs include the
cost of rail service, port charges, ocean freight costs where Elk Valley Coal is
responsible for the expense, and other costs such as coal testing fees and
demurrage charges for vessel waiting times.

About Fording

Fording Canadian Coal Trust is an open-ended mutual fund trust. Through
investments in metallurgical coal and industrial minerals mining and processing
operations, the Trust makes quarterly cash distributions to unitholders. The
Trust, through its wholly-owned subsidiary, Fording Inc., holds a 60% interest
in the Elk Valley Coal Partnership and is the world's largest producer of the
industrial mineral wollastonite. Elk Valley Coal Partnership, comprised of
Canada's senior metallurgical coal mining properties, is the world's second
largest exporter of metallurgical coal, and expects to supply over 27 million
tonnes of high-quality coal products to the international steel industry in
2005. The Trust's shares are traded on the Toronto Stock Exchange under the
ticker symbol FDG.UN and on the New York Stock Exchange under the symbol FDG.

About Teck Cominco

Teck Cominco Limited is a diversified mining company, headquartered in
Vancouver, Canada with assets totaling approximately $6 billion. Shares are
listed on the Toronto Stock Exchange under the symbols TEK.MV.A and TEK.SV.B.
Teck Cominco manages the Elk Valley Coal Partnership and holds a 39% interest in
the partnership, which will increase to 40% on April 1, 2006. Teck Cominco is a
world leader in the production of zinc and metallurgical coal and is also a
major producer of copper and gold. Further information can be found at

Forward-looking Information

Certain information included in this document is of a forward-looking nature.
Forward-looking information is subject to known and unknown risks, as well as
uncertainties and other factors. Accordingly, actual results may differ
materially from those expressed or implied in forward-looking information. Some
of the risks, uncertainties and other factors affecting Fording Canadian Coal
Trust and Teck Cominco Limited are discussed in our respective public filings
with the securities regulatory authorities in Canada and the United States.
Copies of our respective Canadian filings, including each of our most recent
management information circulars, annual information forms, annual reports,
quarterly reports, material change reports and news releases, are available
online at www.sedar.com, and copies of our respective U.S. filings, including
each of our most recent annual reports on Form 40-F as supplemented by filings
on Form 6-K, are available at www.sec.gov. Information in this document is
presented as of April 5, 2005 and is subject to change after this date. Fording
Canadian Coal Trust and Teck Cominco Limited disclaim any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

Contact Information

  • Fording Canadian Coal Trust
    Susan J. Soprovich
    Director, Investor Relations
    (403) 260-9834
    Email: investors@fording.ca
    Catherine Hart
    Coordinator, Investor Relations
    (403) 260-9817
    Email: investors@fording.ca
    Teck Cominco Limited
    Greg Waller
    Director, Financial Analysis and Investor Relations
    (604) 687-1117