Murray, E.ON form coal, power trading firm

OREANDA-NEWS. US coal producer Murray Energy and German power and gas firm E.ON have formed a marketing and trading firm.

The new London-based company, Javelin Global Commodities Holdings, will initially focus on coal and electric power but plans to expand into other commodities.

Murray has signed a long-term export marketing and domestic advisory agreement with Javelin while E.On has entered into a long-term hedging and credit line with the newly formed company.

The agreement will help Murray offer new products such as variable pricing and volume fuel options in electric power markets, the coal producer's chief operating officer Robert Moore said. Javelin will also help with contracts that include physical power offtake, tolling and power price hedging to lock in margins.

"We are no longer just competing with fellow coal producers. Today we are also in a head-to-head battle with low natural gas prices," Moore said.

Javelin chief executive Peter Bradley said he recognized the challenge the new venture faces, but said he is confident to have two key companies in coal markets and other commodities supporting it.

"The onset of shale gas production has changed the energy landscape in the US and abroad and we aim to provide services to clients to better manage their business in this dynamic environment," Bradley said.