CFE, Coahuila producers reach price agreement on coal supply

- Thursday, April 23, 2009

CFE, Coahuila producers reach price agreement on coal supply

Mexican state power company CFE and coal producers of Coahuila state (Prodemi) have reached an agreement on the price of coal, the state firm said in a statement.

CFE and Prodemi agreed on a price of 827 pesos (US$62.8) per ton for the latter's 1.4GW Río Escondido and 1.2GW Carbón II plants.

Prodemi members will supply up to 3.3Mt of coal annually over the course of three years under the terms of the new contracts. The contracts will be able to be renewed for another three-year period.

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CFE recently awarded supply of 11.7Mt coal for its 2.1GW Petacalco plant in Guerrero state to international providers that submitted bids of between US$71-84/t.

The supply covers 50% of Petacalco's coal needs from 2009-12, BNamericas reported at the time.

The tender took on political ramifications given that the international bids of between US$15.6-16.5 per gigacalorie are lower than CFE would have paid for Coahuila coal, at US$16.6/gigacalorie, according to a previous CFE statement.

No Coahuila coal producers opted to participate in the Petacalco supply tender.

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