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Tuesday, 19 February 1980
Page: 12

Mr BRAITHWAITE (DAWSON, QUEENSLAND) - Is the Minister for Trade and Resources aware of claims that the eight-year contract negotiated by the Utah Development Company for the sale of Norwich Park coal is at a price that will depress the coal market? Has the Minister approved this contract? Is it likely to depress the market for other producers?

Mr ANTHONY - I am aware that there has been some criticism of the Utah Development Company's contract of sale for coal from Norwich Park. I am afraid that that criticism is illinformed. What happened was that Utah came along with a new contract, a long term contract which represented a departure from the normal terms and conditions of sales to Japan. As a result I asked my Department to conduct a survey of the industry and ascertain its reaction. Those in the industry who are developing new mines see virtue in long term contracts. I therefore brought down certain criteria that should apply to long term contracts and those criteria now apply to the Utah sale. The criteria are that there be normal escalation clauses for increases in costs and that there also be provision for review or renegotiation of the contract should at any time the price get out of line with what we might term 'fair and reasonable international prices'. The Utah contract conforms with those criteria. I believe that there is some virtue in long term contracts, provided they do not undermine the present pricing structure.

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