Wild weather affects Melbourne trains. Photo: Shutterstock

Kempsey to provide interstate relief

The Australian Rail Track Corporation and operator Pacific National have “revived” the Kempsey rail yard in northern NSW, after last week’s severe weather and flooding damaged and closed the main interstate rail line south of Dungog.

The ARTC has shut the North Coast network to at least May 17, after flooding and other extreme weather events caused significant damage to infrastructure in the region.

With trucks in high demand, Kempsey will play a key role in moving freight between Sydney and Brisbane over the next few weeks, with the interstate network out of action, the ARTC said.

Trucks will be using Kempsey Yard as a temporary stop-off point to unload containers on to a daily train heading north and then picking up extra freight to take south, ARTC’s executive general manager for interstate, Peter Winder said.

“While the use of the yard is only short-term, it is providing us with a critical freight solution while we get the track repaired and back up-and-running again just south of Dungog,” Winder said.

“We would like to thank council for helping us get this temporary solution up-and-running and really appreciate their support in this time of need for the freight industry.

“We would also like to thank the community in advance for bearing with us over the next few weeks while there are some additional truck movements in-and-out of town.”

The yard will be operational over the next three to four weeks starting today (Friday, May 1), from 6am to 6pm with corresponding truck movements around that time frame.

A train will arrive at Kempsey around 6am, and will depart around 8pm. At this stage only one train per day will be operating, the ARTC said.

Train shunting activities within the yard aren’t expected to activate the Belgrave Street level crossing, the corporation added.

Trucks will arrive/depart from Pacific Highway via Frederickton and Macleay Valley Way, First Lane and then onto Gladstone Street.

Trucks will enter the yard via Gladstone Street and exit on to Belgrave Street before turning back up to Gladstone Street to depart. Equipment in use in the yard will include heavy forklifts and it will involve movements of containers from truck to train and vice-versa, the ARTC said.

“We would like to apologise for the short notice around this activity and the inconvenience over the next few weeks. We thank the community for its patience with us, during this emergency solution,” Winder concluded.

Whyalla Derailment - Photo: ATSB

Maintenance shortcuts led to derailment: ATSB

 

An inadequate rail joint likely led to a South Australian derailment last July, the Australian Transport Safety Bureau has found.

Genesee & Wyoming Australia (GWA) train 24KW was travelling towards the port of Whyalla on July 7, 2014, when a break in the line occurred, causing seven fully-loaded bottom-dumper wagons to derail.

The incident took place on a railway belonging to ASX-listed miner Arrium, between Iron Branch and 21km Junction.

Arrium’s track is continuous welded rail, meaning rail segments are joined together through flash welding.

But in the months prior to the incident, the section of rail in question had undergone tamping and re-railing. As a result, rail segments in that section were joined with bolted fishplates (welding was planned for a later date).

A fishplate joint features a pair of metal bars (fishplates) which are placed either side of a rail, and fastened together with a number of bolts.

Fishplate joint. Photo: Creative Commons / PixOnTrax
An example of a fishplate joint. Photo: Creative Commons / PixOnTrax

 

Some rail lines are joined together permanently via the fishplate method. In these cases, Australian standard joints usually feature six total bolts – three on either side of the rail joint – according to the ATSB’s report, released on April 28.

The temporary use of fishplate joints is common practice on a continuous welded line, after maintenance work has taken place. In these cases, just four bolts are typically used – two on either side of the joint – the ATSB said.

But according to the safety bureau, evidence shows that one of the fishplate joints which failed in the South Australian derailment had been secured with just two bolts – one on either side of the joint.

“Examination of the southern rail joint showed that the Iron Baron end of the joint had been fastened with only one bolt,” the ATSB said.

Whyalla derailment -- Iron Baron end of southern fishplate joint with just one bolt. Photo: ATSB
Iron Baron end of southern fishplate joint with just one bolt. Photo: ATSB

 

“While the Whyalla end of the southern rail joint had completely separated during the derailment sequence, the components were recovered and examined,” the bureau continued.

“The holes through both fractured fishplates and the rail web showed no definitive indication that bolting had been installed through two of the three bolt holes, suggesting that the assembly had also been secured through a single bolt through this end of the joint.”

On top of this, the ATSB found that bolt holes on the southern rail joint had been widened through a flame cutting method, making it hard for the bolts to be sufficiently tightened.

“It was … evident that both the field and gauge-side fishplates had been modified by slotting (elongating) the bolt hole using an oxy/acetylene thermal cutting tool,” the ATSB explained.

According to the safety bureau, flame cutting of joint components “is usually only acceptable for emergency repairs,” and when such repairs are made, a speed restriction of 10km/h is usually applied.

In this instance, however, no such restriction was applied. Train 24KW was travelling at 50km/h when the incident occurred.

Adding to the alleged use of just two bolts and widened holes on the southern joint, several fishplates in both the north and south rail joints showed signs of pre-existing fatigue, the ATSB said.

“The southern fishplated rail joint was assembled using inappropriately-modified fishplates with an inadequate number of through-bolts,” the bureau summarised, “reducing its structural integrity and allowing relative movement within the joint under the load of a train.”

Arrium’s rail line was shut for two days following the incident, while recovery personnel and track and train maintenance crew conducted recovery and restoration works.

Whyalla derailment -- Train 24KW. Photo: ATSB
Train 24KW. Photo: ATSB

 

The train sustained “serious” damage, according to the bureau’s report.

As a result of the derailment, Genesee & Wyoming Australia replaced all the fishplate joints with mechanical welding.

GWA and the contracted maintenance company, Transfield Services Australia, also completed an audit of maintenance standards and processes, and in November 2014 Transfield disseminated a document Mechanical Joint Rectification to all track maintenance staff.

 

Tocal washaway - Photo NSW SES

Controlled blast clears NSW’s impromptu suspension bridge

WATCH: ARTC contractors have cleared a section of rail on the damaged North Coast network with a controlled explosion, which was filmed and shared by Tocal College.

Last week’s extreme weather and flooding in northern and central NSW left many sections of track on the North Coast rail network damaged, with ballast washed away in several locations, and entire sections of land washed away in some places.

One such instance of a land washaway occurred in Tocal, creating an impromptu suspension bridge, with photos of the location, as well as other damaged sections of track, shared by NSW SES on Facebook on Wednesday.

To replace the suspended 70m section of track (shown in the first photo) at Quarry Creek, Tocal, the ARTC has had to remove the track itself, using an explosive cutting method.

Local agricultural and conservation education site Tocal College sits adjacent to the site of the controlled blast, and was able to capture it from several angles.

The video suggests the ARTC hired Precision Drill and Blast,  a Mittagong-based contractor, for the explosive cutting work.

rail damage - Transport NSW

North Coast closed to at least May 18?

While the Australian Rail Track Corporation is yet to give a formal forecast for the re-opening of the North Coast interstate network, one of the line’s operators has sent employees home until at least May 18.

Aurizon has stood down employees on its intermodal services between Brisbane and Sydney, as a result of the damage endured by the line during last week’s flooding.

“The recent severe weather in NSW has caused damage to track infrastructure north of Newcastle resulting in network owner ARTC closing certain north-south rail lines in various locations,” Aurizon said on Wednesday.

“Accordingly, Aurizon has stood down employees from 26th April until 18th May at the earliest.”

The operator warned the severe weather could have a significant impact on its FY2015 freight volumes.

The ARTC was forced to close sections of its North Coast network due to flooding and other severe weather activity last week.

The ARTC also closed the Hunter network between Maitland and the Port of Newcastle, but tentatively re-opened the network following extensive repair work on Wednesday, April 29, with the return of normal passenger, coal and freight operations expected in due course.

The North Coast network was more heavily impacted by the bad conditions, however.

“The mid North Coast track between Telarah and Dungog remains closed, however works have been progressing well,” the ARTC said on Wednesday.

“We thank the community for their patience and understanding while works and associated truck movements are underway.”

Again, the ARTC is yet to give a formal forecast for a return on the North Coast network. But if Aurizon’s-own ‘forecast’ of a closure through to at least May 18 is any indication, that would equate to a total closure of at least four weeks for the interstate line.

Coal wagons Aurizon. Photo: Aurizon

Aurizon wins coal haulage border war in Q3

Aurizon recorded a 2% lift in coal haulage in the March 2015 quarter, gaining heavily over competitor Pacific National in NSW.

Formerly owned by the state, Aurizon has for a long time dominated bulk rail in Queensland.

But its major competitor, Pacific National, has in recent years pushed for more of a market share in the Sunshine State. In response, Aurizon has looked to increase its own market share south of the border.

The March 2015 quarter was a perfect demonstration of that dynamic.

Aurizon had a 12% rise in coal volumes in NSW, to 10.7 million tonnes. Pacific National had a 6.8% decline in the region, to roughly 26 million tonnes.

In Queensland, Aurizon saw a 0.5% decline in coal volumes, to 38.9 million tonnes. Pacific National enjoyed an 8.5% rise in the region, to around 14 million tonnes.

So Aurizon gained ground on Pacific National in NSW. And Pacific National gained ground on Aurizon in Queensland. But Aurizon was the overall winner in the quarter.

All told, Aurizon reported 49.6 million tonnes hauled across its coal business, up 2% year-on-year. Pacific National reported 40.0 million tonnes hauled, down 2%.

So score one for Aurizon, at least in the March quarter.

The Queensland operator’s net tonne kilometres (NTKs) were up 1% to 11.5 billion, again benefiting heavily from a 29% rise in NTKs south of the border, and enduring a 3% decline in Queensland NTKs, to 9.7 billion.

Elsewhere in the business, Aurizon’s smaller iron ore operations recorded a 17% decline in volumes, to 6.2 million tonnes, and a 20% decline in NTKs, to 2.4 billion.

The Queensland company’s freight operations saw a 9% drop to 9.8 million tonnes in the quarter, which was associated with a 3% decline in NTKs, to 2.9 billion.

Aurizon explained the disappointing freight results, saying volumes in smaller bulk commodities decreased 5% to 0.4 million tonnes, “due to the expiry of two Queensland contracts, planned maintenance closure for a nickel customer, and weaker than forecast volumes for other customers in both Queensland and WA.”

The operator warned FY2015 volume growth for its freight operations is now expected to be marginal, due to the weaker March quarter, and the recent storms in NSW, which have stopped all intermodal services between Brisbane and Sydney for the time being.

Related story: PN’s coal tonnes slip, NTKs lift

Fortescue Chief Executive Officer Andrew Forrest aboard the first train loaded with iron ore. Photo: FMG

Glimmers of hope for iron ore, but how long will it last?

 

A bounce back in iron ore over the past three weeks has given some breathing room to Pilbara miner and rail operator, Fortescue, and junior BC Iron. But with several forecasts predicting a much lower long-term price, the pair may not be out of the woods.

Since plummeting as low as US$46.70 a tonne at the start of April, the iron ore price has been on the rise, closing at US$58.70 overnight on Tuesday.

While Australia’s ‘big two’ iron ore players – BHP Billiton and Rio Tinto – were still financially safe with the lower iron ore price, the biggest winner in the recent bounce back is undoubtedly Australia’s third-biggest iron ore miner: Fortescue Metals Group.

Estimates on FMG’s all in break-even price for iron ore range from US$53 a tonne to US$50 a tonne, and the miner has said upcoming operational upgrades will reduce costs below US$45 a tonne.

Regardless of where the miner’s break-even is, the rebound in iron ore price is good news, as it more than likely moves FMG from the red to the black in terms of production.

Junior iron ore miner BC Iron, which uses FMG’s railway in the Pilbara, is reportedly now able to produce iron ore at a profit, as well. Analyst UBS believes the junior can break-even so long as the iron ore price stays above US$55 a tonne.

But with several long term forecasts for iron ore still down below US$40 a tonne (Citi’s long term outlook is  a low of US$37 a tonne, and federal treasurer Joe Hockey is said to be working a US$35 a tonne outlook into the May 12 Budget), the miners who are newly back in the black may not be happy for long.

While colourful FMG chariman Andrew ‘Twiggy’ Forrest has blamed major producers for flooding the market with high volumes of iron ore, long term predictions are based more on China’s slowing demand for the commodity.

Prominent economist Ross Garnaut predicted in an op-ed for the Australian Financial Review earlier this month that Chinese steel production will fall this calendar year, meaning that even if global supply slows, iron ore prices will continue to decline.

“From 2007 to 2014, China accounted for more than the whole of the global increase in steel production,” Garnaut wrote.

“Chinese production rose from 489mtpa to 823mtpa. The rest of the world’s production fell from 844mtpa to 839mtpa.”

Garnaut wrote that his Chinese sources believe steel production will fall to just 600mtpa by 2030.

“Falling demand for iron ore will run into the tsunami of new supply from Vale, BHP Billiton, Rio Tinto, Fortescue, Roy Hill, Sino Iron and others,” Garnaut predicted.

“The price trend is down until enough of the old or new supply capacity has been destroyed to balance the decline in demand.”

When Twiggy Forrest was encouraged earlier this month by several commentators to sell off his 33% stake in FMG before it was too late, he dismissed the suggestions, labelling those who spoke out against the mining company as ‘short-sellers’, who were keen to see a dip in the company’s share price so they could buy-low and make a quick profit.

In the past few weeks, it would appear that Twiggy was right, and the accused ‘short-sellers’ have got what they wanted.

FMG’s share price dipped as low as $1.78 on April 13. With the rebounding iron ore price, and a US$2.3bn venture into the bond market late last week which secured the company’s debt situation through to at least 2019, the share price bounced to close at $2.61 on Monday.

But the share price bounce could be seen as a short-term view of a long-term issue. Since peaking at roughly US$190 a tonne in early 2011, dipping below US$100 in 2012 and then peaking again around US$140 in early 2014, the price of iron ore has nose-dived.

And if most analysts are be believed, the short-term rebound in the past three weeks is just that: a short-term rebound.

When the iron ore price was at its lowest, and he was accusing the alleged ‘short sellers’ of panicking the market, Twiggy Forrest suggested a wise businessperson looks not at the short term, but at the long term instead.

“If you’re setting seven-year money, you set it on [what] the company is going to look like over the next seven years,” Forrest reportedly told Fairfax at the time.

“You play a long game, and not be concerned by what might appear in the markets in the morning.”

Indeed, the outlook for FMG and BC Iron may be better now than it was three weeks ago.

But, as Twiggy so rightly said, the short term is not what matters in big business. Long term is key.

Adam Giles rail line - photo Google Earth NT Government

Territory Government explores new 600km rail link

The Northern Territory Government will invest $1 million to investigate the feasibility of a 600km rail line connecting Mount Isa, in Central Queensland, to the Adelaide-Darwin line at Tennant Creek, in the Northern Territory.

Chief minister Adam Giles late last week announced the NT’s 2015 Budget includes a $1 million fund to spend over two years into feasibility studies for the potential new rail project.

“Budget 2015 invests heavily in infrastructure for the Territory’s future,” Giles said.

“A new 600km rail project linking these two centres has the potential to provide enormous economic opportunities, particularly in the resources industry.”

The project would provide a standard gauge rail link to the Port of Darwin from north western Queensland via the Adelaide-Darwin railway, at the same time as opening up access to a broad new area of the NT, Giles said.

“Previous investigations indicated a number of mining companies in the Mt Isa area had an interest in shifting their exports of bulk materials through the Port of Darwin, instead of Townsville, if the cost of transport was right.”

Exporting minerals through Darwin could also alleviate shipping pressures in Far North Queensland, the chief minister added.

“Linking northern and eastern markets would provide incentives to explorers and producers to invest in the NT, creating jobs and driving money into the economy,” Giles said.

The Department of Defence has also reportedly expressed strong interest in the project.

“We’re investing $1 million to investigate the possible corridor acquisition and construction of the rail spur. This business case is expected to take two years to complete,” Giles said.

“This is a project of national significance and the Australian Government will be asked to match this funding in line with its commitment to developing the North.”

The corridor has the potential to include a railway link, pipelines and telecommunications infrastructure, Giles said, explaining there are significant potential cost savings by focusing on a multi-purpose corridor rather treating these as individual projects.

“The proposed link may also provide the opportunity for a new rail experience for tourists if it could connect with existing passenger rail services such as ‘The Inlander’ in Queensland and ‘The Ghan’ here in the Territory,” he said.

“This would be a long term project with a price tag in excess of a billion dollars, but its benefits would be exponential to the Territory and I’m keen to explore whether it’s economically viable.”

If an initial business case proves positive, detailed environmental impact studies, geotechnical investigations, engineering design, sacred sites and heritage clearances would need to be done to refine the project, costings and construction plan.

WICET photo WICET

Despite weak coal market, Aurizon secures new coal export deal

Rail operator Aurizon has secured a contract with miner Caledon to haul up to 4 million tonnes of coal per annum to the new Wiggins Island Coal Export Terminal (WICET) at the Port of Gladstone in Queensland.

WICET has been in development for several years, by its ownership group comprised of eight miners, which operate or plan to operate mines in the region. WICET opened this week, several months later than the original planned date, and with one of its eight owners (Bandanna Energy) having gone into administration.

The price for thermal coal currently sits just above a six-year low. But that has not deterred Caledon.

Aurizon announced a new, long term, performance-based contract with the for haulage of up to 4 million tonnes per annum, thanks to a ramp-up at its Cook mine in Central Queensland.

Aurizon said the new-form contract will deliver a modern and flexible agreement for both Caledon and Aurizon, and cements a long-term relationship between the two companies.

The 11-year contract is effective from May 2015, and runs to June 2026.

The contract was contestable and supersedes Aurizon’s existing contract for 500,000 tonnes per annum, the operator said.

“Aurizon is delighted to renew and extend its relationship with Caledon through to 2026,” Mauro Neves, Aurizon’s executive vice president for marketing, said on Tuesday.

“With these significant expansion tonnages, Caledon is showing great confidence in the strong future of the Queensland coal sector.  Aurizon is pleased to secure this contract and partner with Caledon in this growth.”

The coal will be transported using existing Aurizon electric trains on the Blackwater system to WICET.

Caledon’s Cook Colliery is located approximately 30km south of the Blackwater township in Queensland.

It is an underground operation that produces both coking and thermal coal, at an approximately 80/20 split, respectively.

WICET has been built to provide 27 million tonnes of annual capacity, but can expand to a total of roughly 120 million tonnes per annum.

The terminal’s rail and train unloader can cater for trains of up to 2.5km in length, and can unload at a discharge rate of 9,200 cubic metres per hour (between 6,900 and 8,250 tonnes per hour, depending on product). The rail facility’s feeder belts are 3.2m wide, and feed a 5.6km overland conveyor, which is 1.8m wide and moves at 6.9m/s.

rail damage - Transport NSW

Hunter coal network to open Wednesday afternoon

The Australian Rail Track Corporation has announced that the Hunter Valley coal rail network, which was closed by severe weather and flooding last week, will return to service early on Wednesday afternoon, April 29.

Heavy rain and wind last week left the ARTC’s Hunter and North Coast networks flooded and damaged, with the corporation announcing on Tuesday, April 21 that it had closed the rail lines.

An initial forecast for the Hunter network predicted a possible re-opening as early as last Friday, April 24. But flood waters were slow to recede, and the ARTC had to extend that forecast by at least 48 hours.

On Monday, April 27, the corporation announced that infrequent passenger services would resume in Hunter, but that operations on the Hunter coal rail network were still offline.

“We currently remain unable to operate beyond Maitland,” the track administrator said on Monday.

“Large sections of track are now visible through the water line and the local team has been able to continue repair and refurbishment of signalling and track equipment.

“There are still sections of track with high water levels around Wallis Creek Bridge, however initial inspections of the bridge structure have taken place and are positive.”

A day later, on Tuesday, April 28, the ARTC was able to confirm a forecasted re-opening of the Hunter coal rail line of “early tomorrow afternoon (29 April)”.

“ARTC is working closely with our customers and the Hunter coal chain on the operational start-up plan,” the corporation said.

“ARTC maintenance crews will continue to work through the week to return the track to normal operating conditions.”

The ARTC prepared residents for a noisy few days, saying the work would “involve heavy track repair machines working around-the-clock conducting track resurfacing and rail grinding”.

“This is essential to get the network back up and running and we apologise for any inconvenience caused.”

While the forecast will be welcomed by operators on the crucial Maitland-to-Newcastle line and the broader Hunter network, users on the ARTC’s interstate, North Coast track are in for a longer wait.

The North Coast network, which was crippled by fast-moving flood waters which removed huge sections of ballast, and landslides which in places completely covered the rail line, is still closed a week later.

“The mid North Coast track remains closed, however works have been progressing well,” the ARTC said. “A number of minor repair jobs have been completed.

“Focus remains on two major project sites around Tocal where geotechnical assessments have been completed and all-weather and alternative access roads are being prepared to allow for consistent supply of materials.”

Port of Fremantle - Photo Fremantle Ports

Rail struggle in Fremantle due to ‘shorthaul’ competition

WA transport minister Dean Nalder says while the government is trying to get more freight on rail running through the Port of Fremantle, the mode is not a natural fit for the bulk of its trade.

Nalder has told WA parliament that current market share for freight moved by rail is around 14%.

The government hopes to lift that figure to a 30% share for rail, but the distance travelled by most of Fremantle’s containers is inhibiting that transition.

“It is difficult for rail to compete effectively with road over the shorthaul distances which are involved with the greater part of the Fremantle container trade,” the minister said.

According to Nalder, the state government’s key strategies to increase the percentage of freight moved by rail from Fremantle Ports include investment in railway infrastructure at the port and on lines running to and from the port; improvements in efficiency of rail operations; and continuing subsidies for containers moved by train.

Nalder expects the port of Fremantle to reach maximum container capacity in eight years if there is a high average annual growth rate.

Alternatively a low average annual growth rate would mean the port will not reach capacity for 21 years (through to 2036).

Nalder said the current estimated annual container capacity at the port is between 1.2 and 1.4 million 20ft equivalent units (teus).

The most recent truck survey, taken in 2014, determined that an average of 2600 container vehicles were visiting the port each week day.