Freight Rail

Aurizon confirms talks with CQCN miners, no outcome reached

Aurizon coal train. Photo: Aurizon

Aurizon has confirmed it is in talks with miners over rail access on the Central Queensland Coal Network, but says it is yet to reach a final outcome.

A recent media report indicated Aurizon had reached an agreement with its coal miner customers over rail charges on the CQCN.

Addressing the report on Monday, Aurizon told the ASX it “continues to engage with stakeholders” and “remains committed to trying to work with industry on an outcome,” but said “no agreement has been reached”.

The statement seems to confirm an AFR report from September, which said Aurizon was working with its mining customers to reach an acceptable outcome on the CQCN.

All parties are dealing with a draft ruling from the Queensland Competition Authority (QCA), which dictates how much Aurizon is allowed to earn from operating the CQCN.

The QCA’s draft terms for the next access undertaking would limit Aurizon’s revenue from operating the CQCN to just $3.9 billion over four years, roughly $1 billion less than Aurizon believes it should earn.

This limitation has forced Aurizon to alter its maintenance regime, cutting into capacity by roughly 20 million tonnes per annum, according to the rail firm.

In August, the QCA said it was open to Aurizon and the miners working together on a solution of their own, but Aurizon had so far not confirmed it was engaged in such talks.

Monday’s announcement confirms it is at least engaged with “stakeholders,” but stops short of confirming the report that an agreement has been reached.

“We are currently awaiting QCA Final Decision,” Aurizon concluded.

In October, the Supreme Court of Queensland dismissed Aurizon’s bid for a judicial review into the QCA’s draft ruling.

Aurizon took its case to the Supreme Court on October 22, alleging the QCA’s former chairman, Roy Green, was conflicted when the draft undertaking was being developed, because he later became the chairman of the Port of Newcastle.

Aurizon’s lawyers told the court Green met with the Port of Newcastle prior to leaving QCA, and discussed the impact of Adani’s proposed Carmichael mine on the Hunter Valley coal network.

The lawyers alleged Green then played a “material part” in the QCA’s draft decision.

But Queensland Supreme Court Justice David Jackson dismissed Aurizon’s case, saying the “fair-minded lay observer” would be unlikely to believe Green acted with bias and thus influenced the QCA’s draft undertaking against Aurizon.

“In my view, the connections urged by the applicant that give rise to the alleged reasonable apprehension in the present case are too tenuous or theoretical,” Jackson said.