AusRAIL, Market Sectors

News in Brief ‘ 23 February-1 March 2011

Strong growth for UGL
UGL has reported strong growth, with a 16% rise in first-half underlying net profit of $68.1m, a result underpinned by a 15% increase in sales of $638.4m in the company’s rail division.

UGL Rail’s Earnings before interest and tax (EBIT) were $38.5m, driven by increased demand for the company’s locomotives and freight wagons from the Queensland and Western Australian resources sector and improved performance in maintenance and build projects in the passenger rail market.

“The passenger rail market continues to offer growth opportunities with new manufacturing projects and long term contracts, with increased investment in coal and iron ore markets also presenting further growth opportunities,” the company said in a statement.

First Ore on Ship for Nullagine Iron Ore Joint Venture
The first ore from the 50:50 Nullagine Iron Ore Joint Venture between Fortescue Metals Group and BC Iron Limited was railed then loaded onto a ship in Port Hedland last week for export to China using third party access infrastructure.

BC Iron is the first to utilise Fortescue’s third party access rail line to haul ore from the Pilbara&nbsp to port.

“This loading today marks the newfound ability by smaller mining companies to use third&nbsp party rail and port access to develop otherwise stranded assets into revenue generators&nbsp and job creators for the Australian economy,” said FMG chief executive Andrew Forrest said.

“It is the final, and perhaps most critical, step in Fortescue’s journey to break the previous Pilbara stronghold preventing the transport of third party ore by rail.”

“As promised, Fortescue has used the rail and port infrastructure we designed, built, financed and now operate to transport not just our own iron ore but also the iron ore of otherwise stranded companies in the Pilbara to provide economic and social benefits to all&nbsp Australians,” Forrest said, adding that it is the company’s wish that “every junior miner in the Pilbara can access our infrastructure to grow their companies and our economy”.

Export values tipped to hit record levels
Australian commodity exports are likely to exceed $250bn in value during 2011-12, the Australian Bureau of Agricultural and Resource Economics and Sciences predicts.

ABARE deputy executive director Paul Morris said earnings from Australia’s commodity exports were forecast to rise 14% to a record of $251bn in 2011-12, after a forecast increase of 29% to $221bn in 2010-11.

&quotOver the medium term, commodity export earnings are projected to be maintained around this value in real terms, reaching around $255 billion in today’s dollars by 2015-16,&quot Morris said.

The value of farm product exports is tipped to rise 4.4% to $32.5bn in 2011-12, after an expected rise of about 9% to $31.2bn in 2010-11.

Despite the impact of heavy rain and floods, the forecast value of farm exports in 2010-11 represents an upward revision of about $1bn from the ABARE December forecast.

For mineral resources, meanwhile, the value of exports is expected to reach $215bn in 2011-12, a rise of 16 per cent from a forecast $186bn&nbsp in 2010-11.

This is supported by projected strong commodity demand, especially from China and other emerging Asian markets.