BHP Billiton has announced its terms for the pricing of its coking coal, moving to shorter term market based pricing.

The miner today announced it “had reached terms for a significant portion of its hard coking coal volumes for 2010, based on a structural change to shorter term market based pricing for the contract period.”

In the statement released today, BHP said it had reached an agreement with customers throughout China, Japan, India and Europe.

The statement went on to say that it reflects the company's commitment to achieving market clearing prices over time across all its bulk commodities.

While the statement did not provide further details, BHP chief executive Marius Kloppers at the miner’s half year meeting last month said the spot market is the best indicator of what the supply and demand is and what expectations should be on where prices are heading.

The current spot price of coking coal has jumped to around US$ 220 per tonne, with current contract prices at similar levels, with JFE announcing a three month contract where it will pay approximately US$ 200 per tonne.

The previous year’s agreement saw JFE paying around US$ 130 per tonne. When Australian Mining contacted BHP it was unavailable for comment.

Source: Australian Mining