Australian coal freight firm QR National signed an agreement with a consortium of coal companies for the construction of the $900 million Wiggins Island Rail Project to a new export terminal at Gladstone, South Australia eyed for completion in 2015.

In its disclosure to the Australian Stock Exchange, QR National said its wholly-owned subsidiary QR Network Pty Ltd reached a commercial agreement with Xstrata Coal, Aquila Resources, Bandanna Energy, Caledon Resources, Northern Energy Corporation, Yancoal Australia Pty Ltd, Wesfarmers Curragh and Cockatoo Coal to proceed with the construction of stage one of the Wiggins rail project.

Project construction is slated to begin in early 2012 and full projection completion is expected by March 2015.

It involves the construction of a 13 km balloon loop near Gladstone, upgrades to sections of the North Coast Line, the Moura System and the Bauhinia branch line, as well as duplication of sections of track along the Blackwater System.

The project is expected to generate up to 3,000 direct and indirect jobs during the construction phase and will utilize the services of many local companies and suppliers.

QR will finance the $900 million cost of the project through existing facilities, it said.

QR National managing director & CEO Lance Hockridge said project that will contribute to a 30% increase in the tonnes transported from the southern Bowen Basin coal region.

“The Wiggins Island Rail Project will be one of the largest rail expansions in Australia and represents a significant commitment to the future growth of the Queensland coal industry,” he said.

“This is the first major rail infrastructure investment by QR National as a privatized entity and underscores our strategy to invest in growth projects in coal. Our priorities are to deliver the right infrastructure for our customers when they need it with world class efficiency," he added.

The agreements are subject to the approval of the Queensland Competition Authority and financial close for the Wiggins Island Coal Export Terminal.

QR said the Wiggins rail project will align with the time frames for the proposed coal export terminal and the development of related mining projects.

QR National Executive vice resident and CEO Network Services Michael Carter said the Wiggins rail project agreement herald's the company's network expansion program.

“Through consultation and negotiations with our customers, we have been able to agree commercial terms for expanding the rail network to support growing demand for coal exports,” Carter said