Urgency needed to address below-line rail charges

There’s been a call for urgency to address below-line charges on the Great Northern Railway between Mount Isa and Townsville. Below-line charges refer to the cost of maintaining the 1000km line charged by the State Government. At around $40/tonne, it is described as the most expensive in the country. The line is the export artery for product from the North West Minerals Province. A meeting on the issue attracted around 50 stakeholders including Transport Minister Bart Mellish in Townsville on June 20. It was referred to a consultant whose report is expected by August, according to Member for Traeger Robbie Katter. General manager of Centrex’s Ardmore phosphate operation south of Mount Isa Brian Hall said there needed to be some firm resolutions. Loading containers at the Ardmore phosphate site The size of the issue was described in the company’s financials which Mr Hall said put the annual cost of running the Ardmore operation at around $40 million and the cost of transport, including road freight and above-rail haulage at around $60 million. The State Government was losing out when it came to Ardmore, Mr Hall said. “He (Mr Mellish) basically got nowhere. He made no commitment at all. ‘It's not in the budget, can't do anything on costs’ and we've been referred to Treasury. “I know there's an email come through for the Treasury for an appointment. Whether it'll go anywhere, who knows? “We've suggested to them, (that) we've got some low-grade phosphate that we could export overseas, but too expensive to get it to Townsville. “If they could drop their rail charge, we could export it. Then they would get royalties in taxes and they're, ‘no, no, we can't drop the rail charge’. Well now, you get nothing.” North West Phosphate is an emerging miner building a benefaction plant in Mount Isa and will be relying on rail haulage. Managing director John Cotter said the mining industry had more than repaid the debt on the infrastructure. “We’ve been lobbying hard for a proponent-driven rail incentive that recognises Mount Isa rail line has been paid off several times over and there’s no need for QR to charge the tariffs they do.” History - editor's comment There are currently two above rail operators using the line. A Mount Isa Mines (MIM)/Qube partnership and Aurizon. Glencore-owned MIM shifts its own lead-zinc bulk ore and copper plate to the Port of Townsville. Aurizon caters for other bulk producers using rail. Flood water cuts the Great Northern Railway at Prairie It is an expensive line to maintain and is affected by movement in the black soil and high temperatures. This is to say nothing of the annual wet which falls in monsoon proportions regularly cutting off the line and damaging the ballast to the point where it is impassable. Insiders say the line is also a good money spinner and used to pay for passenger services in south-east Queensland. There has also been suggestion that the state government parks part of its debt in Queensland Rail to maintain a top-line credit rating. Competition Any reduced charges may be a case of delayed gratification for any companies using Aurizon for bulk movements as they wait for market forces to kick in before seeing any benefits. Insiders say this is one of the reasons for government intransigence on the issue. They don’t want to line Aurizon’s pockets with a cut in charges which could be absorbed as profit. Pacific National waits in the wings to get back on the line and Qube logistics, which is in partnership with Glencore to shift MIM product, also competes in this space. Other prospects that could be interested in providing bulk logistics includes Watco which shifts cattle and Martinez which is primarily a below-rail builder.

Urgency needed to address below-line rail charges

Industry Queensland

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