The renegotiation is based on an existing coal haulage contract between the two companies which will allow for a minimum 10 year transportation period and could generate more than $3 billion for Asciano if recent contracts in the Hunter Valley of NSW are any guide.

The take or pay contract will begin on July 1.

Asciano managing director and chief executive officer John Mullen said he was pleased to extend the relationship with Coal & Allied, which demonstrated Asciano’s commitment to investment in infrastructure in the Hunter Valley.

“The successful renegotiation and extension of our contract demonstrates that we are well positioned to support the existing operations and growth aspirations of one of the leading coal producers in Australia,” Mullen said.

“Instrumental in our ability to achieve the outcomes required for both Coal & Allied and our other valued customers in the region is our continued investment in key infrastructure in the Hunter Valley,” Mullen added.

News of the revamped contract comes after Pacific National landed another haulage contract with BHP Mitsui Coal.

Under this contract Pacific National will haul up to 4.2Mtpa through the northern “missing link” project that will connect the Newlands and Goonyella rail systems.