Asciano debt arrangement extended
By Sam Collyer
Asciano has been granted an extension on the maturity date for its working capital and bank guarantees as it looks to finalise its long-running monetisation process this month.
The debt facilities have been extended by six months until November.
The combined facilities have also been reduced from $258 million to $170 million.
Asciano said it had executed final documentation with its banks to extend the maturity date on its working capital and bank guarantee facilities by six months.
The group is currently trying to sell some or all of its assets to ease a $4.6 billion debt.
Several bidders remain in contention and an announcement is expected by the end of June.
Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au
GrainCorp gets rolling stock boost
By Rob McKay
GrainCorp has welcomed New South Wales Government agreement for ownership and management of the State’s branch line, or "broad acre" trains to pass to it, the agribusiness said on May 29th.
Under the agreement, which is effective immediately, 18 48-Class locomotives and 180 wagons were transferred to GrainCorp at no cost.
These trains will be used to consolidate grain from silos on the branch lines into Werris Creek, Parkes, Temora and Junee sub-terminals with subsequent transfer to main line trains to the Newcastle and Port Kembla grain terminals.
The branch line trains would also service grain storage sites managed by other grain handlers.
"The deal provides long term security for the branch line train operations and to growers delivering grain to silos on these lines," GrainCorp managing director Mark Irwin said.
"Under GrainCorp management we are confident that the efficiency of the branch lines trains can be improved, underpinning the long term viability of the lines.
"GrainCorp will, over time, upgrade the 48-Class locomotives and maintain the wagons, to ensure their continued operation.
"Day-to-day operation of the trains will be contracted to Pacific National (PN), the operator of these trains since July 1st last year under an agreement with the NSW Government."
Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au
Final cost of Perth-Mandurah line still unknown
The protracted legal dispute between Leighton Contractors Pty Ltd, representing the Leighton Kumagai Joint Venture, and the former Western Australian (WA) Labor Government over the CBD portion of the Mandurah Line has finally been settled.
The final cost of the CBD part of the project, Package F, has been settled at $439.3million.
WA Transport Minister Simon O’Brien said that Leighton had initially sought $272.8million to settle all outstanding matters on Package F.
“The State Government was able to settle with Leighton Contractors for the significantly smaller amount of $43.675 million, while avoiding years of costly litigation and risk of significantly higher costs,” he said.
“This settlement is in addition to the $7.98 million cost increase, resulting from a judgement handed down late last year by the Supreme Court in relation to ‘rise and fall’ provisions of the City Project contract.”
O’Brien said the cost of the Perth-Mandurah railway is still rising, some 18 months after its completion.
“The State Government still does not have a final total cost figure, despite the previous government’s denials of cost blowouts and claims of fixed price contracts,” he said.
Workers object to QR’s tender process
Queensland Rail’s (QR) decision to open the tender process for the construction of 500 rail passenger cars to overseas companies has reportedly sparked a campaign involving more than 500 employees from regional manufacturers Downer EDI and Bombardier, who met with their union to discuss the matter.
Australian Manufacturing Workers Union (AMWU) state secretary Andrew Dettmer reportedly said that EDI are already producing locomotives at a world competitive price.
BC Iron secures infrastructure deal with Fortescue Metals Group
BC Iron has reached an agreement in principle with Fortescue Metals Group for the provision of rail haulage and port services for BC Iron’s Nullagine Iron Ore Project.
The agreement provides for an initial production target of 3 million tonnes per annum escalating to 5 million tonnes per annum when port and rail facilities are expanded.
“Whilst final details are being worked out, this deal will overcome the critical barriers to production caused by lack of open access to rail and port facilities,” BC Iron managing director Mike Young said.
Oaklands bankable feasibility study commenced
A bankable feasibility study (BFS) is underway for the development of Coalworks’ Oaklands North Coal mine.
"The scope of the BFS will include mine design, coal handling plant, mine facilities and infrastructure," the company said in a statement.
A rail upgrade and operational plan will be developed as a component of the BFS.
Rio ore deal points to slump in benchmark price
By Sam Collyer
A new iron ore price agreement between Rio Tinto and Japanese steelmaker Nippon Steel has given an early indication of the degree to which benchmark prices could fall this year.
Nippon secured a 33 per cent discount on Hamersley iron ore fines on May 26th, with the price set at US$97 a tonne compared with US$145 the company agreed to last year.
The price for lump products will drop 44.5 per cent.
While the deal is unlikely to set the benchmark for iron ore contract prices in place for the bigger export volumes to Chinese steelmakers, it is seen as an initial gauge of the downward trend in prices.
The China Iron and Steel Association – representing the country’s steel industry – has pushed for cuts of up to 45 per cent at a time when many are running at a loss.
Chinese steelmakers are also looking to back out of a deal reached last year which meant they paid a premium for Australian iron ore to factor in a shorter haul compared with ore shipped from Brazil.
South Korean customers are expected to secure new price agreements soon.
The Nippon deal marks the first time in six years that iron ore prices have fallen.
BHP Billiton, Rio Tinto and Brazil’s Vale account for about three quarters of global iron ore trade.
Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au
 
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