STIRLING-based Fergusson Group has won a multi-million-pound contract to supply electricity generator ScottishPower with hundreds of thousands of tonnes of coal for Longannet power station in Fife.

The solid fuel supplier declined to put a value on the contract with ScottishPower, which it said would extend into 2015, but declared the agreement would help secure hundreds of mining jobs in Fife and West Lothian.

A spokesman for Fergusson said the agreement was built on an existing supply relationship between the company and ScottishPower and represented the "first major, long-term supply agreement between both organisations".

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Fergusson said it would source the bulk of the coal for the contract from its indigenous supply chain, which comprises a range of local mining partners in Fife and West Lothian, "providing continuity of employment for hundreds in the area".

Andrew Martin, contracts director at Fergusson, said: "This agreement will provide further security and much-needed continuity for our local mining partners, ensuring investment is maintained in the Scottish economy while also safeguarding and creating jobs in local communities. We estimate our operations support up to 1000 jobs, direct and indirect, across the industry."

Fergusson employs about 200 people directly.

Mr Martin said: "Our coal-sourcing policy has been built around securing a portfolio of competitively priced fuels on long-term contracts, with a small number of reliable and responsible independent mining operators, supplemented by imports."

Fergusson recently declared a rise in annual profits, following sharp falls in earnings in the previous two financial years. It made pre-tax profits of £2.5 million in the year to March 31, 2013, up from £1.85m in the prior 12 months, in a "challenging operating climate". Profits rose despite turnover dipping to £116.2m, from £121m, with the company citing a focus on "operational efficiency".

Fergusson, which supplies house coal as well as selling solid fuel to industrial users, made pre-tax profits of £4.45m in the year to March 2011. Its profits in the year to March 2010 were £10.2m.

The company, owned and managed by brothers Tom and Alan Fergusson, has underlined its growth ambitions by announcing the establishment of an import, export and processing facility at a leased site at the Port of Blyth in north-east England.

This new operation will complement its main processing hub at Hunterston in Ayrshire.