Fording chafes against railways while cost-price squeeze hurts profits
excerpt from The Globe and Mail
February 12, 2008
CALGARY — Fording Canadian Coal Trust says it is being stifled by railway and port shortcomings in getting its coal to market, while currency shifts suppress prices and raise production costs amid general fuel and labour inflation.
“Frequency and timeliness of rail shipments in the fourth quarter of 2007 and early this year fell short of our requirements,” Robert Bell, chief commercial officer of Elk Valley Coal, said after the Fording trust, which owns 60 per cent of the Elk Valley Coal Partnership, reported declining quarterly earnings.
“We had to reduce plant production. If rail shipments do not increase, production and sales volumes will continue to be adversely affected,” Mr. Bell said.
The railways have provided “much higher throughputs” in the past than they did in 2007, Mr. Bell said. “The inherent capacity is there in the system; it's just a matter of finding ways to unlock it.”
