Regardless of a carbon tax and various emissions policies, the mining of mineral resources and their export remains an expanding market and has significant implications for Australia’s resource-related freight rail industry, writes Peter Winder*.
In the past year, China has signed agreements with the Federal Government to provide US$8bn (AU$7.73bn) to build coal mining operations in the Galilee Basin, and a linking 476 km of rail line to expanded coal terminal facilities at Abbot Point in Bowen, Queensland.
China Development Bank agreed in 2010 to inject US$1.2bn (AU$1.16bn) into the new deepwater port at Oakajee, Western Australia, and the linking rail infrastructure to funnel the export of iron ore.
And one of Australia’s major mining companies who declined to be named has announced it will be adding almost $13bn into its coal and iron ore operations with part of these funds devoted to extra rail works and rolling stock.
In separate developments, the Victorian Government’s Regional Development Victoria has granted $3.97m to assist in building “vital rail infrastructure” to haul heavy mineral concentrate extracted from the Iluka mine site at Ouyen in northwestern Victoria.
Hay Point Coal Terminal is expanding in North Queensland with the announcement in March of the creation of a masterplan aimed at doubling the export capacity of the coal terminal over the next decade.
And there are ongoing new investment plans for coal mines, such as the proposed $1.5bn Byerwen project in Queensland.
Bringing these factors together is the Federal Government’s acceptance to review its initial recommendations into its mining tax.
These reforms, according to treasurer, Wayne Swan, will also provide investment in infrastructure, especially in the resources-rich states of Western Australia and Queensland.
Swan said proceeds from the reforms will be directed to a $6bn Regional Infrastructure Fund with at least $2bn each going to WA and Queensland for rail, road and port critical infrastructure, “to maximise the opportunities presented by mining boom mark II".
Infrastructure Australia’s National Land Freight Network Strategy discussion paper predicted that Australia’s rail freight market will increase by 90% by 2030 and export container traffic at Australian ports will increase by 150% in the same timeframe.
This has obvious, significant implications for our resources-related rail freight market.
It is critical that the rail industry responds collectively, with public and private stakeholders needing to address how they will fund and deliver the rail services necessary to meet this significant growth.
These very large and complex projects will require a collaborative approach from key industry players. For Australia’s resources-related rail freight market, the coordination of existing networks with the development of critically needed new networks will be crucial.
For example, the pivotal question is yet to be answered regarding general access to privately-funded mine-to-port rail infrastructure, if at all. This is a real issue for junior and mid-cap miners in WA’s booming Mid West where rail infrastructure is a vital component to unlocking the region’s mineral potential.
The next phase of development requires us to examine how future infrastructure should be divided up among major and minor operators. How is co-ordination of these private assets going to be achieved?
The main thrust of IA’s freight discussion paper is to integrate rail and road freight policy for national economic benefit, and this is to be applauded.
In terms of mineral resources, in outlining its vision for “a single new national network to reflect an emphasis on potential future freight flows, vehicle connectivity, ports and settlements,” the paper singles out the ports of Port Kembla, Portland, Abbot Point, Bell Bay and Dampier, and future developments such as Oakajee and Hastings the rail lines towards the Pilbara and the inland rail route Melbourne-Brisbane/Gladstone.
The paper also notes there is an “important policy interface" with IA’s National Ports strategy.
Australia’s rail industry is about to undergo its biggest investment phase since the mid 1800s.
To maximise investment and ensure the best possible outcome for both private and public organisations, the future delivery approach of rail infrastructure will require a major meeting of minds and the will to work together to make it happen.
*Peter Winder is executive general manager rail,  O’Donnell Griffin Rail
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