Xstrata Buys Coal Trains For New South Wales Operations

Xstrata PLC (XTA.LN) said Friday it is purchasing three coal trains to transport coal from its mines in the Hunter Valley region of New South Wales state to the Port of Newcastle for export.

The miner already has a contract with rail haulage group Pacific National, owned by Asciano Group (AIO.AU), for the transport of 30 million metric tons of coal a year.

A spokesman for Xstrata said the new trains would have capacity to transport more than 10 million tons of coal to port a year and would begin operating in 2011.

"It is an opportunity for us to provide greater security of supply for our customers," he said.

Congestion issues at Newcastle port were now being addressed through a recently agreed export plan to come into effect next year, and Xstrata was now acting to ensure it also had sufficient rail infrastructure to service planned expansions, the spokesman said.

Xstrata exported seven million metric tons of coking coal and 33 million tons of thermal coal from its Hunter Valley operations in 2008.

The miner's move to run its own trains pitches it as a competitor to current rail operators in the Hunter Valley, Pacific National and Queensland Rail.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; [e-mail]