Aurizon coal wagons. Photo: Aurizon

Aurizon prevails in Wiggins Island appeal case

The Queensland Court of Appeal has dismissed an appeal by a group of miners over charges imposed by Aurizon for upgrades of the Wiggins Island Coal Export Terminal at the Port of Gladstone.

The decision is the latest in a court battle that has been running since March 2016, when Aurizon challenged the validity of notices by the miners who sought to reduce how much they would have to pay for the upgrades.

In a statement to the ASX, Aurizon welcomed the court’s decision.

“Today’s decision by the Queensland Court of Appeal means that the customers’ notices are invalid and Wiggins Island Rail Project (WIRP) Fees are payable to Aurizon.”

The company said that no revenue has been accrued for the above regulatory fees since the project was completed in 2015 and the decision does not impact Aurizon’s regulated return for the project.

In a separate Expert Determination process, it was stated that the WIRP fee should be reduced, and Aurizon indicated it is looking at options for appealing that outcome.

Aurizon, which manages the central Queensland coal network in addition to its above rail operations, invested roughly $800 million in the WIRP. However, since completing the WIRP in 2015, coal prices have dropped significantly, leading to the miners seeking to reduce their costs.

With some of the original owners of the Wiggins Island export terminal going into administration, the cost for the remainder to access the port had increased.

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.

ARTC details benefits of longer coal trains in Hunter Valley

The Australian Rail Track Corporation (ARTC) has detailed plans to improve coal train capacity in the Hunter Valley region of New South Wales.

The combined strategy of longer trains and trains that can run closer together is intended to increase capacity, boosting productivity and efficiency for coal mining companies in the region that are reliant on the route. The Hunter Valley coal chain feeds coal to busy export terminals at Port Waratah and Newcastle.

Train length in the Hunter Valley is limited to 1,543 metres at present, but the ARTC stated in a report that increasing train lengths could be “a potentially effective mechanism to increase capacity when implemented in a systematic manner”.

The plans form the backbone of the ARTC’s 2019 Hunter Valley Corridor Capacity Strategy, which looks at ways to provide capacity to meet contracted coal volumes in line with the ARTC Hunter Valley Access Undertaking (HVAU).

“ARTC is continuing to review options for longer trains, and is currently undertaking engineering investigations,” read the report.

“Further modelling will be required to validate capacity impacts and opportunities.

“Subject to the findings of the engineering investigations, ARTC will develop business case assessments of the costs and benefits of providing necessary infrastructure enhancements.”

The ARTC points to in-house technologies such as the ARTC Network Control Optimisation (ANCO) project and Advanced Train Management System (ATMS) as ways to offer significant improvements in efficiency by increasing the use of existing assets through digitisation for a relatively low cost, in keeping with the preference of thermal coal producers.

The ARTC also advised that empty trains travelling on single track sections be allowed to travel at 100km/h. Trains with 120-tonne capacity wagons are currently permitted to run at 60km/h when loaded and 80km/h when empty.

The group said that it would work with operators to undertake analysis and risk assessment to determine the viability of this speed increase.