Aurizon to lift threats of cutting $4 billion in exports revenue

Following the dispute between the Queensland Competition Authority (QCA) and monopoly network operator Aurizon over QCA’s latest draft ruling, the Queensland Resources Council (QRC) today announced that it will not come into partnership with the QCA under duress.

QRC chief executive Ian Macfarlane said, “The coal industry is prepared to sit down with them to develop a united position to the Queensland Competition Authority. But we won’t do it with a threat hanging over our head.

“Only last week, senior management of Aurizon reaffirmed their threat to stop the movement of up to 20 million tonnes of coal per annum.”

Last December the QCA released a draft ruling stating that Aurizon — the service provider of the largest export coal rail network in Queensland— could only recoup $3.89 billion from its network business from July 2017 to June 2021, which was $999 million less than Aurizon wanted.

In order to manage with the lost income, Aurizon decided to drive its maintenance costs as low as possible by slashing up to 20Mt of Queensland coal exports a year— 10 per cent of total exports.

Macfarlane said, “Aurizon needs to resume normal maintenance practices immediately and keep that commitment until the next QCA undertaking is finalised and implemented. They need to remove the threat. We won’t negotiate under duress.”

The 20Mt reduced coal exports will result in a trade loss of $4 billion per annum, and cut royalties used to pay for state government services and infrastructure by a staggering $500 million per year.

Coal is projected to emerge as Australia’s largest export earner, generating $58.1 billion for the 2018–19 financial year, overtaking iron ore.

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