QR National signs agreement with coal mining consortium on Wiggins Island Rail project
QR National has signed an agreement with a consortium of coal companies to construct the $900 million Wiggins Island Rail Project to a new export terminal at Gladstone.
QR National’s wholly owned subsidiary QR Network Pty Ltd has reached a commercial agreement with Xstrata Coal, Aquila Resources (ASX:AQA), Bandanna Energy (ASX:BND), Caledon Resources, Northern Energy Corporation (ASX:NEC), Yancoal Australia Pty Ltd (Yancoal), Wesfarmers Curragh and Cockatoo Coal (ASX:COK), to proceed with the construction of Stage One of the Wiggins Island Rail Project.
Construction is due to begin in early 2012, with first railings scheduled for mid-2014 and aligned with port capacity. All remaining works are due for completion by March 2015.
The project supports the initial 27 million tonnes per annum of coal to the proposed Wiggins Island Coal Export Terminal at Gladstone.
QR National Managing Director & CEO, Lance Hockridge, said he was delighted to announce the project that will contribute to a 30% increase in the tonnes transported from the southern Bowen Basin coal region.
“The Wiggins Island Rail Project will be one of the largest rail expansions in Australia and represents a significant commitment to the future growth of the Queensland coal industry,” he said.
“This is the first major rail infrastructure investment by QR National as a privatised entity and underscores our strategy to invest in growth projects in coal.
“Our priorities are to deliver the right infrastructure for our customers when they need it with world class efficiency, to achieve commercial outcomes for our shareholders and to meet our regulatory obligations.”
The arrangements are subject to the approval of the Queensland Competition Authority and financial close for the Wiggins Island Coal Export Terminal.
The Wiggins Island Rail Project will align with the time frames for the proposed coal export terminal and the development of related mining projects.
QR National Executive Vice President and CEO Network Services, Michael Carter, said the Wiggins Island Rail Project agreement is a major demonstration of network expansion as provided for under the company’s Access Undertaking with the Queensland Competition Authority.
“Through consultation and negotiations with our customers, we have been able to agree commercial terms for expanding the rail network to support growing demand for coal exports,” Mr Carter said.
“QR National has substantial expertise at designing and delivering rail infrastructure on its 2,300 kilometre coal network that is tailored to meet customer demand in line with developments at the mines and Queensland’s major coal ports.
“The investment will represent an approximate 20% increase in QR Network’s regulated asset base.”
The Wiggins Island Rail Project is expected to generate up to 3,000 direct and indirect jobs during the construction phase and will draw on the services of many local companies and suppliers.
The project includes construction of a 13 kilometre balloon loop near Gladstone, upgrades to sections of the North Coast Line, the Moura System and the Bauhinia branch line, as well as duplication of sections of track along the Blackwater System. Upon completion, the mainline
Blackwater System will be fully duplicated.
The project will be financed by QR National through existing facilities.