Commodities giant Glencore plans to use more trucks in its North Queensland operations, after a review found it to be a cheaper short-term option than rail.
According to an ABC Rural report, Glencore’s Australian copper assets chief Mike Westerman said rail was in the company’s long-term plans, but road freight was cheaper for now.
Rail operator Aurizon in January took a $10 million impairment over the loss of a contract to haul mine inputs and outputs from Glencore’s Mt Isa operation to the port at Townsville.
Glencore reportedly said Pacific National won the deal, but without wagons for now, the company has opted to go with road haulage.
“As any operation would do, we went out and sought expressions of interest as [Aurizon’s] contract was ending,” he was quoted by the ABC.
“As part of that commercial process, we had a rail provider that was significantly cheaper than the other and we eventually went for Pacific National.”
After failing to come to terms on a deal to buy Aurizon’s wagons, Glencore is spending over $2 million to build its own.
Until then, the material will travel by road.
“It would have been good to have an orderly transition from one rail provider to another, but we were unable to strike an agreement,” he was quoted as saying.
“I’m frustrated that we can’t come to a solution that’s in the best interest of all parties.”
Flinders Shire mayor Jane McNamara is not happy with the news, calling for a road tax for companies like Glencore.
“Anybody that drives the Flinders Highway at the moment is seeing the effects of having so many more trucks on the road,” McNamara was quoted by the ABC.
“They’re talking 50 or 60 more triple road trains on the Flinders Highway every day.
“Just the safety aspect of that … it’s alright this time of the year, but can you imagine what it’s going to be like once we have tourists on the road.”
According to the report, McNamara has been talking with other mayors in the area about talking the State Government into imposing a tax on heavy users of road transport.