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Glencore floats 30-year supply contract to lure investors for coal haulage ops

Glencore Plcplans to offer a 30-year guarantee on its Hunter Valley coal haulage operationsto lure infrastructure investors into the upcoming auction for the business, The Australian Financial Review reportedMarch 29.

The proposal involves an initial 15-year contract, which wouldsee Glencore obtain coal from the Hunter Valley mines to the Port of Newcastle,with exclusive rights for an additional 15 years.

According to the report, such contracts normally span from fiveto eight years.

The embattled Swiss mining giant got into the train businessin 2010, pumping A$350 million for nine trains and the infrastructure needed tosustain a coal freight that could carry 40 million tonnes a year. Glencore is lookingto sell the business above A$800 million and is hoping to generate competitive interestto earn A$1 billion whenit finalizes the sale by the third quarter.

The mining giant has made a A$1 billion pitch to Australia'sinfrastructure players, including IFM Investors and QIC Ltd., Macquarie Group'sMacquarie Infrastructure and Real Assets, Canada's Brookfield, and Morgan StanleyInfrastructure and Global Infrastructure Partners.

Glencore is also targeting ASX-listed coal carrier , Pacific Nationalas well as Genesee & Wyoming, which already has a contract to drive and maintainthe company's rail fleet.

The company is expected to decide the final terms in April.