Asciano To Haul BHP Mitsui's Coal In Australia's Bowen Basin

Infrastructure group Asciano Ltd. (AIO.AU) has won a contract to carry 4.2 million tons of coal from BHP Mitsui Coal's mines in Queensland state.

Asciano, whose Pacific National subsidiary accounts for 80% of coal haulage in the Hunter Valley of New South Wales state, has just 11% of the market in Queensland's Bowen Basin. The Bowen produces more than half of the world's coking coal used in steelmaking.

The contract with BHP Mitsui, a 50-50 joint venture of BHP Billiton Ltd. (BHP) and Mitsui & Co. Ltd. (8031.TO) which operates the South Walker Creek and Poitrel mines, will see Asciano carrying the coal over the so-called northern missing link line.

Once it is completed early next year, the line will connect the Bowen Basin to the northern port of Abbot Point, where BHP is building a new coal export terminal. BHP's existing terminal at Hay Point is already close to capacity.

"Winning this contract with such a major coal producer is a coup for our growth aspirations into the key expansion port of Abbot Point," Asciano Chief Executive John Mullen said in a statement.

The contract would run from 2013 and be on a take-or-pay basis, meaning that BHP Mitsui would have to pay for hauling an agreed volume of coal whether it was able to provide the product or not. Mines in the Bowen Basin have been hard hit by seasonal rainfalls over the past year, and rail operators are reluctant to agree contracts that would see them lose revenues in the event of production shortfalls.

Pacific National has scored contracts with Anglo American PLC (AAL.LN) and other miners that would see the company carry 49 million tons a year from 2012.

-By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com

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