VANCOUVER, Feb. 11 /CNW/ - Westshore Terminals Income Fund (TSX: WTE.UN) (the "Fund") announced today that Westshore Terminals Limited Partnership has concluded a new agreement with Teck Coal to handle a portion of the coal from Teck's Elkview, Cheviot and Line Creek Mines for the period April 1, 2010 to March 31, 2012.
The existing contract that covers coal from the Elkview mine expires on March 31, 2010. Approximately 3,800,000 tonnes of coal were shipped under that contract in calendar 2009. Teck and Westshore are also parties to a Port Services Agreement ("PSA") that covers coal from Teck's Fording River, Greenhills and Coal Mountain Mines. The PSA runs to February 29, 2012, and provides that substantially all coal from those three mines shipped through westcoast ports will be shipped through Westshore.
Under the new agreement, Teck has committed to ship through Westshore 3,000,000 tonnes of coal in each of the next two contract years from the Elkview, Cardinal River and Line Creek Mines in whatever proportions it chooses. The parties have agreed on a fixed rate for the committed tonnage for two years, with a slightly lower fixed rate for any tonnage that Teck chooses to ship through Westshore from those three mines in excess of its commitments. In conjunction with this agreement, Teck has agreed not to pursue a rate review under the PSA that was initiated by Teck in 2006, and Westshore has agreed that for the final year of the PSA (the 2011/12 contract year) all the rates under that agreement will be fixed and will not vary with the coal price.
Under the existing Elkview contract, substantially all coal from the Elkview Mine is shipped through Westshore at a rate which varies with the price of coal. Since coal from the Elkview, Cardinal River and Line Creek Mines will, commencing April 1, 2010, be shipped through Westshore at fixed rates, and all rates under the PSA will be fixed for the 2011/12 contract year, Westshore estimates that for the 2010/11 contract year (April 1 to March 31) 30% of its throughput will be shipped at rates that vary with the price of the product shipped, including coal shipped by Westshore's US customers. For the 2011/12 contract year the throughput to be shipped at variable rates is expected to be less.
Denis Horgan, General Manager of Westshore Terminals Limited Partnership commented: "This agreement underscores the importance of the Teck-Westshore relationship, and Westshore's position as a key link in the coal chain. It marks another important and positive step in the continuing relationship between the two organizations."
As a result of this agreement, and based on higher volumes anticipated to be shipped during the first quarter of 2010 and on other information currently available to Westshore from its customers, it is now anticipated that throughput levels for 2010 should be in excess of 22 million tonnes.
The foregoing statements concerning tonnages, coal prices, loading rates, taxation and variability of distributions are forward-looking statements but reflect the current expectations of the Fund and Westshore with respect to future events and performance. Wherever used, the words "may," "will," "anticipate," "intend," "expect," "plan," "believe," and similar expressions identify forward-looking statements.
Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at which, such performance or results will be achieved. Forward-looking statements are based on information available at the time they are made, assumptions made by management, and management's good faith belief with respect to future events.
SOURCE Westshore Terminals Investment Corporation
For further information: For further information: Nick Desmarais, Secretary, (604) 488-5295