The 30-month contract, effective from January 1, rewards John Holland for quickly mobilising to start mining at Isaac Plains in October under a temporary arrangement.

Aquila said the Leighton Holdings subsidiary would provide full service mining operations including clearing, topsoil stripping, drill and blast, truck excavator waste removal, coal mining, rejects haulage, dump profiling and rehabilitation works.

“Signing with John Holland represents another step towards simplifying the Isaac Plains operation and bringing it to steady state and consistent production,” Aquila said.

“It is also an important foundation in the move to increase the mine’s production to the target of 3.6 million tonnes of run-of-mine coal per annum – which is awaiting a final step in the environmental approval.”

Isaac Plains produces metallurgical and thermal coal, and ramped up to capacity of 2.8Mtpa last year.

A new dragline is expected in the last three months of 2010.

Vale and Aquila each own 50% of the mine.

Aquila shares are down 21c to $10.92 this morning.