Fording Canadian Coal Trust

Fording Canadian Coal Trust

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 markets."

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

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

additional tonnes;

- 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


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

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, 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 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
    Fording Canadian Coal Trust
    Catherine Hart
    Coordinator, Investor Relations
    (403) 260-9817
    Teck Cominco Limited
    Greg Waller
    Director, Financial Analysis and Investor Relations
    (604) 687-1117