Wesfarmers Ltd (ASX:WES) says it has secured an increase to its metallurgical coal prices for the first three months to 31 March 2011.

The retailer and coal miner says quarterly price negotiations for metallurgical coal from Wesfarmers Resources' Curragh mine in Queensland's Bowen Basin have now been concluded with most customers.

For the January 2011 to March 2011 quarter, new contract prices of Curragh metallurgical coal will increase by approximately 12 per cent as compared to the October 2010 to December 2010 quarter prices.

The Managing Director of Wesfarmers Resources Stewart Butel said the company is satisfied with the result of its negotiations for Curragh's hard coking coal, with price settlements for the January 2011 to March 2011 quarter at approximately US$221 per metric tonne, free on board from Queensland.

According to him, "Recent severe flooding in Central Queensland is significantly impacting Curragh's metallurgical coal production and QR National's Blackwater line with rail operations on this line not expected to resume before mid January 2011 at the earliest. Force majeure remains in place for export and domestic contracts.

"As advised on 4 January 2011, Curragh's metallurgical coal sales volume is now forecast to be in the range of 5.8 to 6.2 million tonnes for the 2011 financial year, subject to no further significant wet weather and satisfactory rail and port operations. This compares to a pre-flood forecast of 6.0 to 6.5 million tonnes," Mr Butel said.