with the existing narrow-gauge QR National line to Hay Point until tonnages reach a level that justifies a new link to Abbot Point. Other players currently exploring the Galilee Basin include Brazilian miner Vale, and the Chinese-backed Macmines. The incumbent railway in the region, QR National (to be renamed Aurizon this month), has also put forward its own solution. The Central Queensland Integrated Rail Project (CQRIP), estimated at around $A 2bn, would upgrade QRN’s Abbot Point to Newlands corridor, with a branch then following Adani Group’s chosen alignment to the Carmichael Mine and an extension roughly following Waratah’s alignment to Alpha using both narrow and standard-gauge tracks. The first stage would expand the
Queensland N
Abbot Point Bowen
Collinsville Newlands
Mackay
Galilee Junction
Carmichael
Blair Athol
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keen to accommodate other coal producers on their tracks, BHP Billiton is adamant that while it is happy for any rail corridor to be wide enough to accommodate tracks for other producers, it would want its own dedicated track - in much the same way it sees its Pilbara iron-ore railway being an integral part of the production process.
Another Indian investor, the Adani
Group, has its Carmichael coal mine project, which initially would link up
IRJ November 2012 Project Alpha Gregory Emerald Rockhampton Blackwater Goonyella Moranbah
1067mm-gauge lines Diesel lines Electrified lines Electrified line to be upgraded
current capacity on the Goonyella/ Newlands corridors by at least 25mtpa to 75mtpa by duplicating sections of the Goonyella - Abbot Point (GAP) railway which would also include a deviation around the township of Collinsville to minimise the impact on local residents. Worried about the duplication of expensive infrastructure from competing interests, the Queensland government
Standard-gauge lines Recognised lines Proposed lines
Hay Point Pacific Ocean
announced in June that it would recognise only two rail corridors to serve the mining developments
in the region: the east-west rail corridor being developed by QR National and Adani
Group, and a north-south corridor straddling the proposed GVK- Hancock Coal JV alignment for a completely new 500km standard-gauge multi-user line north to Abbot Point.
The government says the two corridors are the only areas where it is likely to use its powers to compulsorily acquire land for new lines and it will work towards declaring State Development Areas to define the two preferred corridors. Seeking to reassure other miners that they will not be disadvantaged, the government says it will guarantee third party access to the corridors and has not ruled out other miners being able to co-locate their own railway lines within
the north-south corridor should they consider that to be more commercially viable.
GVK has continually maintained that its railway alignment is the most efficient and cost-effective option and has also said that it is the most advanced, with agreements already reached with a majority of landowners, rail infrastructure manager accreditation in place, and operational modelling and ground surveys complete. The cost of constructing the 495km rail corridor is estimated at $A 3.5bn, with trains of up to 25,000 gross tonnes transporting thermal coal to Abbot Point for export. GVK claims the 1 in 320 ruling gradient makes it the most efficient bulk haulage route available. Initial capacity and current approvals are for 60mtpa, however the line is scalable to 120mtpa on single-track with passing loops, whilst duplication and additional loops would enable further capacity expansion.
The high stakes involved have certainly raised tensions at times with Palmer threatening to sue QR National for $A 8bn over what he says was a breach of confidentiality and misleading conduct in relation to the CQRIP proposal. He is also targeting the Queensland government for its preference for the GVK rail corridor over his own proposal, and in October Palmer publicly questioned the financial bona fides of GVK.
But bigger issues may yet derail some of these projects. The continued high value of the Australian dollar and falling commodity prices combined with the difficulty in raising capital has put a dent in mining industry confidence around the country. The decision by BHP Billiton to put on hold indefinitely most of its mining developments in Australia, including its major Bowen Basin mine and rail expansion, has not helped. As a result, the start-up date for the various mines appears to have slipped from 2015 to 2016. GVK was originally planning to have financing in place by the end of the year, but this has slipped to the middle of 2013. However, GVK believes investors will take confidence from the key environmental approvals it received in October from the federal government for its rail and port options. Both the GVK and Adani projects are tied to providing a secure supply for thermal power generation projects in India and observers suggests this means it is a matter of ‘when’ rather than ‘if’ these projects and the associated rail developments go ahead. IRJ
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