The Queensland Resources Council (QRC) chief executive Michael Roche announced a “new wave of industry activism” at the Australian Rail Summit in Sydney accusing Queensland’s rail and port operators of being less than customer focused in recent times.
Roche made the call after announcing that a coal transport rail corridor between the northern Bowen Basin and the Abbott Point export terminal in Queensland had been given the green light by coal companies.
“Despite the project’s potential to consolidate future growth, there is no hiding the fact that industry’s interest in the Northern Missing Link and expansion of the Abbott Point coal terminal is a direct response to the difficulties being experienced along the Goonyella corridor,” Roche said.
Roche said that seven companies interested in using the 69 kilometre Northern Missing Link had confirmed with the Queensland Competition Authority (QCA) their willingness to underwrite early works costs undertaken by the State Government-owned Queensland Rail Network Access (QRNA).
Queensland Rail (QR) has welcomed confirmation that mining companies are willing to underwrite early works costs for the project in North Queensland.
The early works costs associated with the 69-kilometre Northern Missing Link are estimated to be worth $27 million and will be recouped by the State Government through QRNA via independently determined rail price arrangements, regardless of whether the project proceeds.
“Once endorsed by customers the cost with the early works will, upon completion of the early works, be included in QRNA’s regulated asset base for the Goonyella System,” a QR spokesman told Australian Mining.
“Access charges for the operation of coal services on QRNA’s rail infrastructure is based on recouping the capital charge (depreciation and return) as well as maintenance and operating costs as agreed with the Queensland Competition Authority,” the spokesman said.
“Final go-ahead will depend on execution of port and rail contracts by the companies, which will in turn depend on the economic findings of this early stage engineering and design,” Roche told the Australian Rail Summit.
Roche’s call for a new wave of industry activism may have been heard by QRC’s largest member companies.
During a whistle-stop visit to Brisbane, Rio Tinto boss Tom Albanese told reporters that the backlog plaguing Australia’s east coast ports is among the top-five problems facing the mining giant’s global operations.
Albanese said Rio Tinto will redirect its expansion plans offshore if the Queensland Government does not provide vital infrastructure, prompting Queensland Premier Peter Beattie to meet with him to smooth over relations.
Roche says that unprecedented growth in the industry is responsible for the delay in haulage capability up to a point.
“There’s no embarrassment in saying that the demand for coal has caught both the industry and logistic suppliers by surprise,” Roche said.
“However, there is embarrassment, coupled with major financial penalties for service users, when infrastructure providers cannot manage to deliver contracted capacity,” he said.
“Resource companies should not be hamstrung by their logistics suppliers.
“Communication must extend to customers, regulators and shareholders to eliminate ‘suprises’ which cost throughput, drive up demurrage bills and encourage buyers to look elsewhere for reliable supply.”
QR expressed disappointment with Roche’s comments.
“Queensland Rail is disappointed with some comments made by Michael Roche because QR and industry partners were midway through the independent review of the Goonyella Coal Supply Chain,” a QR spokesman told Australian Mining.
“We’ve received a lot of attention recently about performance in the coal business and we’ve certainly heard our customers’ concerns,” the QR spokesman said.
“QR has always accepted that we could have performed better, but like all industry players the size and scope of global demand for coal was not forecast.”
“QR’s attention now is finding short-term gains in the supply chain to meet immediate customer needs and to rollout long-term infrastructure and rollingstock upgrades to meet growth through to the end of the decade and beyond.”
The QRC’s independent review of the Goonyellla coal supply chain, due early August, has been supported by the Queensland government and QR.
The review is expected to highlight the need for strategic coordination of the coal chain master planning process, greater transparency on operational issues and performance, and an agreed set of measures to asses how the system is operating, according to Roche.