Asciano expects the deal to earn the company $550 million in revenue over the contract period.
With extra competition from Queensland Rail National in the state, and even the possibility that new entrant Xstrata Rail might offer to rail third-party coal later this decade, Asciano was pleased to renew this haulage contract with Centennial.
“Centennial Coal is a long-term customer of Pacific National and has solid growth prospects ahead. We look forward to growing our partnership with Centennial and continuing to deliver superior quality of services for the long term,” Asciano managing director Mark Rowsthorn said.
Asciano said it recently executed three other long-term take or pay contracts with Yancoal’s Austar mine, Vale’s Integra Coal operations and Idemitsu’s Muswellbrook Coal Company.
These deals are expected to reap $275 million in revenue over the life of the contracts.
“All three contracts are renewals of existing Pacific National Coal volumes and include additional growth tonnages,” Asciano said.
The company added that Whitehaven Coal and Idemitsu Boggabri have each requested an additional train of capacity under their existing agreements with Pacific National.
The two new train sets are expected to start up in the December quarter of 2011.
Rowsthorn said Pacific National has renegotiated 60% of its current volumes over the past 18 months.
“The execution of these contracts in the Hunter Valley solidifies Pacific National Coal’s leading market position and its ability to meet the needs of its customers,” he said.
Asciano shares were unchanged at $6.17 yesterday.