Xstrata, the world's largest thermal coal exporter, has settled thermal coal contracts with Japan's Chubu Electric for the business year starting this month at $125 a ton, up 125 percent, a source close to the deal said on Monday.
The settlement price compares with last year's $55.65, based on Xstrata's final settlement price with a group of Japanese utilities.
The contracts are for coal with gross calorific value of 6,322 (GAR) kilocalories per kilo.
This is the first confirmation on settlement prices since speculation late last week that the two firms had agreed on 2008/09 term supply prices at about $125 per ton free-on-board Newcastle.
Chubu Electric, Japan's third-largest utility, would be the first Japanese utility to have struck a deal with an Australian supplier.
Industry sources expect the price to set the tone for future talks between other utilities such as Japan's biggest thermal coal user, Electric Power Development (J-Power).
Chubu, Japan's second-biggest thermal coal user, plans to buy 9.99 million tons of coal in 2008/09, while J-Power plans to consume around 20 million tons.