Aurizon flags own Pilbara rail network
Iron ore producer Fortescue Metals continues to negotiate over a stake in its $US3 billion port and rail infrastructure, but it is yet to reach a deal it deems favourable.
Still, Aurizon chief executive Lance Hockridge says his company, formerly known as QR National, could opt to build its own greenfield rail network.
"The concept is essentially around the heart of being open-access," he told ABC television. "It would be open to all comers as opposed to being dedicated to individual miners."
But Mr Hockridge said more worked needed to be done to advance the idea.
"I emphasise, again, it's at concept phase and we need to do a good deal more work," he said.
Iron ore miners Brockman and Atlas have previously approached Aurizon about the idea of a new rail network, but Mr Hockridge declined to confirm if mining magnate Gina Rinehart had made overtures about her Roy Hill project.
"We're talking to a wide range of people," he said.
Atlas Iron managing director Ken Brinsden told the same program that a potential Aurizon line would need multiple customers to get up.
Meanwhile, Aurizon is expecting iron ore prices to moderate, amid forecasts of a China slowdown.
"It's clearly not the kind of growth rates that we might be experiencing or indeed expecting a year or two ago," Mr Hockridge said.
But he was convinced that China still had stable growth potential, which bodes well for iron ore.
"Our view is that fundamentally this is and will remain a good business for a long time yet to come."
Mr Brinsden said he expected iron ore prices to hold above $US100 a tonne. AAP
Frequently Asked Questions about this Article…
Aurizon has flagged the possibility of building its own greenfield rail network in the Pilbara. CEO Lance Hockridge says the idea is at the concept phase and the company needs to do more work before proceeding.
An open-access rail network would be available to all users rather than dedicated to a single miner. Aurizon says the concept would allow multiple customers to use the line instead of being exclusive to individual mining projects.
According to the article, iron ore producers Brockman and Atlas have previously approached Aurizon about the idea. Aurizon’s CEO declined to confirm whether Gina Rinehart had made overtures about her Roy Hill project, and said the company is talking to a wide range of people.
Fortescue Metals is negotiating over a stake in its approximately US$3 billion port and rail infrastructure. The company has not yet reached a deal it considers favourable, separate from Aurizon’s concept for a new Pilbara network.
The proposal is at the concept phase. Lance Hockridge stressed more work is required to advance the idea, including further studies and discussions with potential customers and stakeholders.
Aurizon expects iron ore prices to moderate amid forecasts of a China slowdown, but the company remains confident that China still has stable growth potential and that iron ore will remain a good business over the long term.
Atlas managing director Ken Brinsden said he expected iron ore prices to hold above US$100 a tonne, reflecting a view among some industry figures that prices will stay relatively elevated despite moderation.
For everyday investors, the project could signal strategic diversification for Aurizon and a potential shift in how Pilbara rail capacity is supplied (open-access versus miner-dedicated lines). However, the idea is still at concept stage, so investors should watch for further developments, customer commitments and how iron ore market conditions evolve before drawing conclusions.
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