UPDATE: Asciano Signs Contract With Anglo Coal In Queensland

Asciano Group (AIO.AU) continues to build customers at its Pacific National coal business, signing up Anglo Coal as its fourth Queensland coal haulage customer.

Asciano is also bringing forward its purchases of rolling stock for its coal haulage business in New South Wales state's Hunter Valley, citing forecasts of a sharp rise in volumes over the next two years.

"We are extremely pleased to have Anglo Coal on board," Asciano Chief Executive Mark Rowsthorn said Tuesday in a statement.

Anglo Coal, which is a unit of Anglo American PLC, has agreed to a 10-year, take-or-pay contract starting July 1 with annual capacity of 5.75 million metric tons from its Moranbah North mine in the Goonyella system.

Asciano's other long-term contracts starting July 1 are with Macarthur Coal Ltd., Rio Tinto Ltd. and Xstrata PLC.

The port and rail operator in May commissioned its second diesel-powered coal train for the Queensland coal fields.

Asciano said it is also in "detailed discussions with a number of key existing Hunter Valley Coal haulage customers regarding anticipated contract renewals over the next two financial years."

"Asciano has a high degree of confidence in the anticipated outcome of these contract renewal processes," the company said.

It is also discussing, with one of its major existing customers, a long-term haulage contract for their New South Wales tonnages from 2011 onwards.

Asciano said it will place orders for an additional 12 locomotives and 400 120-ton coal wagons to supplement its Hunter Valley Coal fleet.

The total capital expenditure commitment is about A$160 million, of which approximately A$30 million will be spent immediately, with the balance spent progressively through next fiscal year.

Asciano expects a net increase in volumes for its Hunter Valley business of between 40% and 50% above current volumes by December 2012.

At 0250 GMT, Asciano was up 3.4% or 4.5 cents at A$1.355, compared with a 1.5% rise in the S&P/ASX 200.

-By Iain McDonald, Dow Jones Newswires; 61-2-8272-4681; [e-mail]