Toll, Solid Energy reach deal over coal transport

By ELLEN READ


Toll NZ and Solid Energy have resolved their differences and struck a 13-year deal to transport West Coast coal to Lyttelton.

The agreement will see Solid Energy freight up to 3.8 million tonnes of coal a year by rail from 2007/08.

This year, 2.4 million tonnes of coal will be transported to Lyttelton, rising to 2.7 million tonnes in 2005/06, before reaching capacity the following year.

The increased tonnage will eventually see eight trains - one extra a day - travelling between the West Coast and Lyttelton.

Solid Energy chief executive Don Elder said the deal was a "significant milestone as it secures the future of our export coal business through Lyttelton and allows us to maintain our competitiveness in international markets".

Toll NZ chief executive David Jackson said the deal created transparency and a new environment to enable it to deliver an extremely important export for the country.

The agreement also established a framework for the possible transportation of Solid Energy coal on other parts of the rail network, including carrying it to ports in Westport and Greymouth.

The coalminer and rail company had been at loggerheads since only 2.1 million tonnes of the 2.4 million tonnes of coal ordered was carried to Lyttelton last year.

The coal route between the West Coast and the port will receive at least $25 million of the $200 million the Government is investing over the next four years to improve rail tracks.