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The dispute covers coal transported from Elk Valley Coal’s mines in southeastern British Columbia to Vancouver area ports for overseas export.
Elk Valley majority owner Fording Canadian Coal Trust said on Monday the confidential mediation process was not binding and success depended upon the parties reaching a consensus.
Legal proceeding associated with the dispute will be suspended pending the outcome of mediation.
Elk Valley Coal Partnership is the world's second largest exporter of metallurgical coal, capable of producing approximately 25 million tonnes of coking coal.
Canadian Pacific Railway is a transcontinental carrier operating in Canada and the U.S. with 14,000-miles of rail network.