(EnergyAsia, March 12 2013, Tuesday) — Australian freight operator Aurizon said it has secured a new long-term, performance-based contract with BM Alliance Coal Operations Pty Limited (BMA) and BHP Billiton Mitsui Coal Pty Limited (BMC) to haul up to 65 million tonnes per year (t/y) of coal from their combined mine operations in Queensland state.

The contract represents the entire volume put up for tender by the two companies for coal delivery to the ports of RG Tanna in Gladstone, and Hay Point and Dalrymple Bay near Mackay. The renewal for the Blackwater system starts from July 1 2015, while the Goonyella system contract starts from July 1 2016.

The new contract replaces the existing 2005/6 legacy contract with up to a 12-year term, new-form contract. It provides improved commercial returns for Aurizon based on a flexible, performance-based contract for BMA and BMC.

With this renewal, Aurizon said its conversion of old-form contracts into new-form performance-based contracts for customers will increase from 38% for FY2012 to approximately 95% of the company’s expected railed tonnages from FY2017.

Aurizon managing director and CEO Lance Hockridge said:

“BMA/BMC is a highly-valued Aurizon customer. We’re committed to delivering superior service to them today, tomorrow and well into the next decade.

“This is the largest contestable haulage contract in the Australian coal market in a decade. It represents about a quarter of the entire Queensland coal haulage market.

“We’ve worked extremely hard to deliver a service package that is large-scale, flexible and performance-based.”

Aurizon executive VP (Commercial and Marketing), Paul Scurrah, said the agreement included supply chain performance monitoring and productivity sharing initiatives. The contract includes the haulage of coal from the mining operations in Blackwater, Gregory, South Walker Creek, Poitrel, Riverside, Goonyella, Saraji, Peak Downs and Daunia.

Aurizon is Australia’s largest rail freight company with services operating across five states. Last year, the company transported more than 250 million tonnes of freight, including coal, iron ore, other minerals, agricultural products and general freight.

Previously known as QR National, Aurizon also operates and manages the 2,670-km Central Queensland network that links mines to coal ports at Bowen, Mackay and Gladstone.