Tranz Rail has confirmed a deal to transport up to a million tonnes of coal annually from Tauranga to Huntly from late this year.
Currently the tonnage is being moved by road from the Port of Tauranga to Huntly for Genesis Power, but rail transportation will begin later this year.
Tranz Rail'snational manager bulk freight, Steve Muir, says the confirmation of the deal is good news for the rail company and good news for motorists with the coal moving off the road and onto rail tracks.
The Port of Tauranga signed a 10-year agreement with Genesis Power last year for the importation of coal for the Huntly Power Station.
Thirty-three coal wagons will be needed to move the coal. These will be constructed at Tranz Rail's Hillside workshops in Dunedin.
The wagons will be covered to prevent coal dust contaminating sensitive retail and residential areas enroute.
Each train will carry 1500 tonnes of coal from a major new storage facility to be constructed at Mount Maunganui.
Tranz Rail said the new facility would be able to handle 70,000 tonnes making it one of the largest of its kind in the world.
When talks first started last year, Genesis Power chief executive Murray Jackson said rail offered the perfect option to move such a large tonnage and provided flexibility and competitive pricing for Huntly over the long term.
Tranz Rail shares were trading unchanged at $1.40 this morning, having traded between 30 cents and $1.70 over the past 12 months.
