The coal supply agreement states Tarong has been granted an option to buy 5.7Mtpa from the New Acland mine for 25 years, with the potential for up to 30 years, from 2011.
The deal is subject to Tarong exercising its option, as the state-owned enterprise already has two other supply options it could exercise. Tarong has up to the end of June 2007 to decide which source of supply it will choose.
The agreement is also subject to New Hope producing coal of a sufficient quantity and quality and will be subject to a tax ruling and Australian Competition and Consumer Commission (ACCC) approval.
New Hope said while a long-term supply contract with Tarong would be valuable to the producer “there was a number of significant hurdles to overcome in order for it to become certain”
The New Acland mine is located 16km north of Oakey on the Darling Downs, and 65km from the 1400MW Tarong Power Station which supplies 25% of Queensland’s electricity.
The mine currently produces 2.5Mtpa of thermal coal for export and domestic markets and is being upgraded to produce 4Mtpa.
