RJB Mining, Britain’s largest coal mining group, has signed a deal to supply National Power with up to 28 million tonnes of extra coal until 2003.
The contract, made up of committed tonnages and options, could be worth £1.3bn. The generator had already contracted to buy 18 million tonnes from RJB over five years from last April.
However, RJB will probably need to come close to world coal prices to secure the full 46 million tonnes.
The deal is a boost for RJB, which has seen profits collapse over the past year due to weaker demand and pressure on prices.
Last week, it announced the closure of its Nottinghamshire Calverton colliery, with the loss of 200 jobs, and warned of further closures.