Asciano said the take-or-pay contract, starting from January 1, 2011, would replace a number of existing contracts with Xstrata.

The new contract will generate total net revenue in excess of $800 million during the 10-year period.

“The contract enhances Pacific National’s significant footprint in coal haulage in NSW, which is expected to increase in scale by more than 50 per cent in the next five years,” Asciano said.

“Pacific National can provide coal producers like Xstrata with structured contracts that include reciprocal performance measures to ensure coal haulage volumes are maximised and aligned with other elements of the coal supply chain.”

Asciano managing director and chief executive Mark Rowsthorn said the agreement was the largest-executed, single-customer contract for Pacific National’s coal division.

“We believe the scale of our operations in NSW and our ability to offer performance-based contracts is important to our customers in an environment where they are accepting increased ‘take-or-pay’ exposure to secure long-term port and track capacity,” he said.

“Pacific National is looking to further utilise this competitive advantage in coal haulage to continue to grow its coal business in both NSW and Queensland.”

At the start of the month, Asciano landed a 10-year, take-or-pay contract to haul 5.75 million tonnes per annum from Anglo Coal Australia’s Moranbah North longwall mine in Queensland.

In May, Asciano won a nine-year, take-or-pay contract from Macarthur Coal to haul up to 3.7Mtpa, starting this month.

Macarthur Coal will continue to use rival rail operator Queensland Rail to haul coal from the Coppabella and Moorvale surface mines.

Pacific National, the dominant Hunter Valley rail operator, started commissioning its diesel-powered coal trains in Queensland in early April.

Asciano shares closed 3c up to $1.35 yesterday.