Australia's Aurizon cuts coal haulage guidance due to QCA's draft plan

2018-02-13 15:12:00 Company,  International argusmedia.com

Australian rail firm Aurizon has cut its forecast coal haulage volumes to 210-220 million tonnes for the 2017-18 fiscal year ending 30 June from 215-225 million tonnes, as it changes its maintenance plans in Queensland to compensate for lower regulator-approved revenues in its networks business.


The change in maintenance planning could cut Queensland coal haulage capacity by 20 Mtpa or more out until 2021, Aurizon told investors at its half-year results on February 12.


Aurizon has written to its coal mining customers in Queensland to advise that it will be less flexible in its maintenance programme to reflect a draft Queensland Competition Authority (QCA) decision that it only be allowed to earn A$3.9 billion ($3.05 billion) in revenue between 1 July 2017 and 30 June 2021. This is $1 billion less than Aurizon believes it should be allowed and the firm intends to save money by carrying out maintenance at fixed times rather than when it suits its coal mining customers.


This rigid maintenance regime will cut the coal haulage capacity of Aurizon's rail network and could affect the capacity of other third-party coal haulage firms that use Aurizon's network in Queensland, and ultimately the amount of coal that can be shipped from Queensland ports. Australian rail firm Pacific National and coking coal mining joint venture BHP Mitsubishi Alliance (BMA) both run trains on Aurizon's Queensland coal network.


Aurizon owns and operates the Goonyella, Blackwater, Moura and Newlands rail networks in Queensland. It does not operate the West Moreton network, which feeds into the Port of Brisbane and is operated by Queensland Rail.


Aurizon is appealing the QCA draft decision, but says it must implement the changes to its maintenance regime progressively to align its business practices with the initial decision.


Total haulage across Aurizon's Queensland network by all rail operators was 116.6 million tonnes for July-December, up from 112.9 million tonnes in July-December 2016 and from 97.9 million tonnes in January-July 2017 when Cyclone Debbie closed the Goonyella line for almost a month. The network has a nominal capacity of 225 Mtpa, but this could be cut by at least 20 Mtpa to 205 Mtpa following the QCA decision, according to Aurizon.


Aurizon reported earnings before interest and tax for its coal business of A$222.5 million for July-December, up from A$218.1 million in the same period last year and from A$201.8 million during January-June.


Around 52% of the coal hauled by Aurizon was thermal coal and 48% coking coal in July-December, which was in line with the mix delivered in 2016-17.


(Writing by Becky Du   Editing by Tammy Yang)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

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