Bowen Rail Company to enter Queensland haulage market

A new rollingstock operator is in the process of establishing itself to haul coal to Abbot Point.

Bowen Rail Company has applied for accreditation as a rollingstock operator with the Office of the National Rail Safety Regulator (ONRSR). If the application is successful, the Bowen Rail Company will legally be able to operate rollingstock.

The Bowen-based business, which according to reports is owned by mining company Adani, stated in an August press release that it will be focused on servicing the Abbot Point terminal, where Adani will export the coal mined at its Carmichael mine.

“Bowen Rail Company’s initial focus will be to provide haulage services to the existing Abbot Point export terminal using the industry’s most technologically advanced rail fleet.”

The press release states that the company has purchased locomotives and rollingstock, with the first four locomotives to arrive in 2021. Bowen Rail Company head of project delivery David Wassel said the type of locomotives purchased would enable the company to hire more broadly.

“The benefit of our fleet is that it can be operated by anyone once they have had the right training, regardless of their physical size, age or experience, which means we can open up operator-type roles to a much broader workforce and to people who haven’t necessarily worked in the rail sector,” he said.

“Our goal is to ensure approximately half of our workforce is comprised of new-to-rail industry employees.”

The establishment of the company follows Adani’s struggle to secure an above-rail haulage agreement with an established operator.

In 2019, Adani was snubbed by Genesee & Wyoming Australia, now known as One Rail Australia, and Aurizon had been under pressure from shareholders to not provide above-rail services to Adani. Aurizon said it was not aware of Adani seeking to negotiate above-rail services.

“We are not aware Adani has commenced any commercial process with regard to the tender of above-rail haulage contracts or indeed whether they intend to,” said an Aurizon spokesperson.

Adani will still have to negotiate an access agreement with Aurizon to use the Central Queensland Coal Network, which connects that Carmichael Rail Network to the Abbot Point terminal. Aurizon is legally obliged to consider and assess all access requests however a spokesperson said that all requests are confidential.

“We cannot comment on any discussions that may occur as part of any application made by Adani,” the Aurizon spokesperson said.

To meet the other requirements of operating a rail haulage company, a Bowen Rail Company spokesperson said the company would go it alone.

“Bowen Rail Company will be self-sufficient with respect to rollingstock maintenance and supporting infrastructure. All contract arrangements are commercial in confidence.”

Construction of the Carmichael Rail Network is currently underway, with piling for bridge structures about to begin.

Martinus

Martinus beginning major works on Carmichael Rail Network

Martinus is about to begin piling works for the first bridge on the Carmichael Rail Network.

Already, construction of the first of many waterway crossings has begun while bulk earthworks continue.

Chief operating officer Ryan Baden said the project involved a number of civil construction processes.

“We are delivering the port-side civil works, which is around 86 kilometres of the earthworks formation with 10 multi-span superstructures – one that spans 50 metres, 87 culvert structures and three-million cubic meters of cut to fill.”

The $340 million works program, announced in two separate contracts, covers rail laying to connect the Adani mine to the Central Queensland Coal Network, and the associated civil construction works.

To prepare the rail for installation, on-site flash-butt welding is taking place.

Martinus has 300 staff on site working on the project and is looking to involve locals wherever possible.

Aurizon

Aurizon posts increase in profit, earnings with limited COVID impact

Aurizon has increased its earnings before interest and tax (EBIT) by 10 per cent on the previous year’s results and a 12 per cent increase in profit.

This improvement was largely driven by increased earnings from Aurizon’s managing of the Central Queensland Coal Network (CQCN) and strong performance of the company’s bulk business.

These results include the impact of COVID-19 on the business, which managing director and CEO Andrew Harding said had limited impact.

“Despite the emergence of COVID-19 in the second half of FY2020, the Company has delivered a solid operational and financial performance with no material impact as a result of the pandemic,” said Harding.

With much of Aurizon’s business involving the haulage of metallurgical coal, consistent steel production in China and a rebound of steel production in India in May and June helped the freight operator through the COVID-19 period. In addition, a drop in US metallurgical coal exports contributed.

In Aurizon’s coal business, it added new customers including Peabody and Bluescope and added volume in the contract with Coronado.

On the bulk side of the business, Aurizon added contracts with BGC for cement products from Kalgoorlie. Aurizon extended its contracts with South32 Cannington and Incitec Pivot, both on the Mt Isa corridor. Aurizon began the operation and maintenance of a ballast cleaning machine for Rio Tinto in the Pilbara and there was an increase in demand from Mineral Resources. These led to a 21 per cent increase in revenue from bulk operations.

In Aurizon’s management of the CQCN there was a shortfall of volume. Volumes are expected to be lower in the next year due to COVID-19.

Aurizon also reported on its safety record over the 2019-2020 financial year. While there was a 10 per cent improvement in the total recordable injury frequency rate, there was an 8 per cent deterioration in rail process safety performance.

Adani awards second rail civil works contract

The contract for civil construction works on the Carmichael Rail Network has been awarded to BMD.

Mining company Adani announced that the $350 million contract would include earthworks, drainage, bridges, rail camp construction, and road upgrades to connect the Adani mine site to the Central Queensland Coal Network.

The announcement is the second civil works contract awarded for the Carmichael Rail Network, with Martinus delivering a separate package of work.

Adani Mining CEO Lucas Dow said that the local company would be suited for the job.

“BMD is a proud Queensland company and we’re thrilled to have them on board and delivering the largest package of works awarded on our project,” said Dow.

“As people will already know BMD has operated in North Queensland for more than 25 years, with Townsville forming their regional base for delivery of this contract.”

Dow expects the works to create 600 jobs.

Scott Power, group executive director – operations at BMD said that local suppliers and communities would benefit.

“At a time when jobs across the country are hard to come by, this project is generating much needed employment opportunities for locals and locally based suppliers in north and central Queensland,” said Power.

“The award of this contract is recognition of the capability and capacity of Australian contractors and provides a boost for our teams, supply chain and the communities in which we operate.”

In total, 200km of rail will be constructed, comprising 26,417 tonnes of steel and 319,000 sleepers. The line will progress over 460 culverts, 17 bridges over waterways, 2 road over rail bridges, 68 crossings, and local road upgrades.

Achieving sustainability

Australia’s largest rail infrastructure project, Inland Rail and Australia’s largest rail freight operator, Aurizon, share how they’re meeting sustainability targets.

Successful management of sustainability- related targets requires a collaborative effort. Once the 1,700km rail network is complete, Inland Rail will be the backbone of Australia’s national freight rail network. The scale and the significance of the project creates an opportunity to set new benchmarks and standards in environmental and socio- economic performance.

Similarly, as the operator of a rail network distributed across regional Australia, Aurizon’s has the potential to contribute to sustainability in the communities in which it operates. The company’s sustainability strategy sets out that it aims to achieve resilience and resourcefulness through the transportation of bulk goods and commodities. While environmental strategies are an essential focus for both Aurizon and Inland Rail’s network, social sustainability is key facet of their approach to sustainability.

Most directly, social sustainability is promoted by both network managers in the design, maintenance and construction of rail track and associated infrastructure. As Inland Rail is transitioning from the design phase to construction, the company is primarily focused on benefiting regional towns along the alignment over the next stages of the project. Meanwhile, Aurizon is ensuring it is sustaining employment and enhancing businesses in the non-metropolitan areas of its rail network.

Creating opportunities for the development of a skilled local workforce through construction and operation is helping to deliver key national priorities for infrastructure and economic policy. In Inland Rail and Aurizon’s respective rail transport system, linking communities and strengthening the rail and national supply chain industries go hand in hand.

INLAND RAIL’S SUSTAINABLE PRIORITIES
Richard Wankmuller, Inland Rail CEO, stated in last year’s annual sustainability report that Inland Rail’s focus on social, environmental, and economic sustainability ensures the organisation is continuously striving to deliver the best possible outcomes for communities and the natural environment. Wankmuller acknowledged in the 2018-19 report that the once-in-a-generation rail project is only in its early phase, enabling Inland Rail to provide a unique opportunity to influence the effectiveness, benefits, and outcomes from its model for future rail infrastructure.

With the first stage of construction of the 103km Parkes to Narromine project expected to be completed in mid-2020, the billions of dollars invested to create the Brisbane to Melbourne rail freight network is also an investment for local communities and affected landowners to mitigate long-term economic and environmental impacts and create ongoing community benefits. With the separate sections of Inland Rail’s alignment at under varying stages of development, going forward, the sustainability program will commence annual public reporting of environmental and socio- economic benefits realised during the design and construction of the program.

According to Rebecca Pickering, Inland Rail director of engagement, environment, and property, Inland Rail is aiming to establish a new sustainability benchmark for environmental and socio-economic performance for Australian Rail Track Corporation (ARTC) operations and the rail industry more widely. “Our engineers don’t need prompting about Inland Rail’s sustainability opportunities. Largely in this design phase, the team is driving smarter and innovative strategies that have never been seen in the industry before,” she said.

Pickering credits the wider strategic business framework of Inland Rail for empowering regional and local communities to take advantage of the thousands of jobs and millions of dollars of procurement that will be generated during construction of the Inland Rail alignment. “To achieve our vision, we need to be innovative, agile and global in our thinking. Sustainability provides a framework to drive and support this culture,” she said.

Pickering said the environmental, social, and cultural outcomes are of equal importance to Inland Rail’s economic objectives. “We’ve already achieved success in managing impacts and creating connectivity in regional communities. A major chunk of recent success is the ability to provide sustainable jobs, which has been crucial during the current state of the economy,” she said. At the peak of construction, Inland Rail will create more than 16,000 direct and indirect jobs. An additional 700 ongoing jobs will be created once Inland Rail is operational. Pickering said $89 million has been spent with local businesses on-top of wages and every stage of construction is another opportunity to improve engagement and achieve ongoing sustainability.

“Not everything is set in stone, it’s a changing landscape so it’s super exciting and inspiring to connect so many regional communities. Recycling of materials, further consultation, and exceeding sustainability requirements are a focus as our strategies evolve,” Pickering said.

AURIZON’S SUSTAINABLE FUTURE
Aurizon’s reporting of its environmental, social, and financial sustainability has given an insight into how the ASX-listed company is managing the impact of a widely dispersed railway network throughout central Queensland. According to its 2019 sustainably report, Aurizon is committed to continuing its strong track record in supporting a highly efficient and globally competitive supply chain for Australian commodity exports, especially for coal. Aurizon takes a direct approach to reporting environmental, social and governance (ESG) disclosures to stakeholders with the publication of its annual Sustainability Report. In August 2019, Aurizon maintained a ‘Leading’ rating for the fifth consecutive year from the Australian Council of Superannuation Investors (ACSI) for corporate sustainability reporting in Australia. Having received this rating for over four consecutive years, Aurizon has again been considered a ‘leader’ by ACSI, along with 45 other ASX200 companies.

Andrew Harding, Aurizon CEO and managing director said it’s important that the company creates a business that is not only strong commercially and performs well for customers, but also plays a positive role in the regional communities. “It is a genuine demonstration that while we develop our business and operations to ensure the company’s ongoing success, it is the strength, resilience and resourcefulness of our people that are key to our sustainability,” Harding stated in the opening to Aurizon’s most recent sustainability report.

An Aurizon spokesperson said the company’s current priority and focus is sustainably managing the business through the COVID-19  pandemic.“Understanding our material impacts is necessary to develop our strategy and operate sustainably, and that addressing these impacts is key in creating sustainable value for our stakeholders,” the spokesperson said.

Sustainability is central to Aurizon’s response to the current challenging times. “Our core value is safety, and Aurizon has implemented a range of proactive and practical measures to protect the health and safety of employees as well as provide business continuity to our customers. We cannot achieve operational performance objectives or maintain our social licence to operate unless we ensure the safety of our employees, our contractors, and our communities,” the spokesperson said.

Aurizon reset its strategic framework in 2018. Since the re-modelling to ensure the sustainable success of the business, the new Strategy in Action framework has been driving focus in Aurizon’s short-term activity within a framework of what is required for long-term growth and success. “We strive to ensure that our sustainability framework reflects significant economic, environmental, and social priorities that may influence strategic decision-making or have significant impacts on our business and our key stakeholders. As such, we continuously assess the material issues that affect our business, our stakeholders, and our operating environment,” the spokesperson said.

In taking a broad approach to sustainability, both Aurizon and Inland rail demonstrate the importance of resilient freight rail transport networks to the ongoing vitality of regional communities.

Operators meeting strengthening demand for rail freight

Figures released by Aurizon show that there has been greater demand for rail freight services in the March quarter of 2020.

The Queensland based business, which operates the Central Queensland Coal Network, as well as coal services in NSW and South East Queensland and national freight services, saw a 2 per cent increase in total above rail volumes when compared to the 2019 March quarter.

The growth was driven by a 12 per cent increase in bulk volumes, however coal volumes remained flat.

In an ASX statement, the company attributed the growth to strong volumes of iron ore from Mt Gibson, in the Kimberly and Mid West of Western Australia. However, the overall level of growth in the bulk sector was affected by the flooding of the Mt Isa line in the March quarter last year, which restricted volumes in that period.

The flat demand for coal volumes were affected by the ramp down of New Acland mine, industrial action and adverse weather in February and march which impacted the Centre Queensland Coal Network.

Aurizon also noted that there has been greater demand for freight rail services from Linfox due to increased demand for consumer goods during the coronavirus (COVID-19) pandemic. Aurizon has put in place extra preventative measures and there have been no cases of COVID-19 among Aurizon employees.

Linfox has been redeploying some of its workforce from affected operations to manage this demand for grocery products and the company is ensuring that supply chains remain open, said Linfox Logistics CEO Australia and New Zealand, Mark Mazurek.

“It is critically important that Linfox’s warehousing, road and rail networks continue to function safely and efficiently and that we can work collaboratively to deploy our people into new roles.”

Coal train derails in central Queensland

Coal trains have been disrupted in central Queensland, near the town of Middlemount.

An unloaded coal train operated by Aurizon derailed on January 19, at roughly 1pm AEST.

According to statements reported in local media, a locomotive and a number of wagons have been derailed, and Aurizon is mobilising recovery crews.

Aurizon notified other coal miners in the area as their shipments may also be affected. Nearby mines include German Creek, owned by Anglo American, and Glencore’s Oaky North.

After 25 to 30 coal bins tipped over, power lines were brought down, and a small grass fire ignited. The fire was subsequently brought under control.

Reports suggested that the line will reopen by Friday, January 24.

The two train drivers were uninjured.

Aurizon operates the largest export coal rail network in Australia, the Central Queensland Coal Network. The 2,670 multi-user track stretches from Bowen to Gladstone.