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BHP Billiton, the world's largest mining company, today admitted that it has slashed the price of the coal it sells to major steelmakers by 58% after a slump in demand.
The firm said that it has settled a “significant portion” of supply contracts with “key global customers” but admitted rates this year were almost two thirds lower than in the 2008 shipping year.
In March, BHP accepted a 60% discount on coking coal from Japan's Nippon Steel, in a deal that set the precedent for 2009 prices.
The discount coal prices come after global steel output tanked by 23% in the first two months of 2009 compared to a year earlier, according to the World Steel Association, as worldwide building projects were put on hold.
