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Queensland Rail said Sunday that it has signed an 11-year contract with Peabody Energy Australia, a unit of Peabody Energy Corp. (BTU), to haul 12 million metric tons of coal a year from Peabody's Wambo and Wilpinjong mines to the port of Newcastle in New South Wales state, Australia.

"With this contract we are increasing our minority share of the Hunter Valley (coal) market and cementing our position as a strong number two player in the market," Queensland Rail, or QR, said in a statement.

QR, which is a government-owned corporation, will support the contract with an investment of more than A$100 million in rolling stock, it said.

Competing against QR for Hunter Valley coal haulage is Asciano Group's (AIO.AU) Pacific National coal business.

Asciano said June 30 that it was bringing forward purchases of rolling stock for its coal haulage business in the Hunter Valley, citing forecasts of a sharp rise in volumes over the next two years.

-By Iain McDonald, Dow Jones Newswires; 61-2-8272-4681; iain.mcdonald@dowjones.com