(Recasts with background, analyst comment)
By Nicole Mordant
VANCOUVER, Dec 12 (Reuters) - Teck Resources Ltd said on Monday it has agreed with major customers a benchmark price of $285 a tonne for the first quarter of 2017 for its top quality steel-making coal, the highest quarterly price in more than five years.
The price is 43 percent up on the fourth-quarter industry benchmark of $200 a tonne, and helped to boost Teck's share price by nearly 3 percent to close at C$22.96 on the Toronto Stock Exchange.
Earlier on Monday, Japanese steel mill Nippon Steel & Sumitomo Metal Corp and mining company Glencore Plc settled the January-March premium hard coking coal price at $285 a tonne, Platts reported quoting unnamed parties familiar with the negotiations.
If other international steelmakers follow this price, it would be the highest industry quarterly benchmark since the fourth quarter of 2011.
Prices for steel-making or metallurgical coal have quadrupled this year on the back of Chinese government curbs on domestic production and supply disruptions, reviving the fortunes of producers like Teck, which just a year ago was struggling to reduce debt and lost its investment-grade rating amid weak commodity prices.
Vancouver-based Teck, also said it has ratified new five-year collective agreements with unionized employees at its Fording River and Elkview coal mines in British Columbia.
Teck's first-quarter realized prices will reflect a combination of sales at the quarterly contract price and spot sales, the Vancouver-based company said in a statement.
As a result of the higher prices, Teck should be able to reduce its net debt to C$6.2 billion ($4.73 billion) by the end of the first quarter of 2017 from C$7.6 billion at the end of September, said RBC Capital Markets analyst Fraser Phillips.
The de-leveraging of Teck's balance sheet "will continue to drive outperformance of Teck's share price over the next three to six months," Phillips said in a note to clients.
Teck's shares have surged nearly 500 percent this year, on the back of the coal price rally and helped by stronger zinc and copper prices as well.
The Fording River agreement would expire on April 30, 2021 and the Elkview contract on Oct. 31, 2020, Teck said. As a result of the new collective agreements, Teck expects to incur a one-time, after-tax charge to profit in the fourth quarter of approximately C$35 million ($26.65 million). ($1 = 1.3118 Canadian dollars) (Reporting by Nicole Mordant in Vancouver; Editing by Chizu Nomiyama and Lisa Shumaker)