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Aurizon and Ensham re-sign until 2024 despite reduction

AURIZON has secured the future of its Ensham haulage contract, extending the agreement with the Q...

Staff Reporter

The new performance-based agreement is for 5.5Mtpa of coal to be railed between the Ensham mine complex in Central Queensland to the port of Gladstone.

Aurizon spokesman Mark Hairsine said the new agreement was a “decrease in line with haulage requirements of [the] customer.”

The agreement follows Ensham’s job and production cuts late last year.

Ensham, which is 85% owned by Japanese Idemitsu and also has South Korea's LG as a shareholder, is one of Queensland’s biggest thermal coal mines.

Ensham announced late last year that it was slashing jobs and reducing thermal coal production by 2Mtpa, to about 5Mtpa.

Ensham director Koji Arai said the new agreement was an important step in securing the long-term future of the mine.

“This agreement aligns Ensham’s haulage arrangements with the changing needs of the business,” Arai said.

“We are pleased to take this opportunity to extend our long-term business relationship with Aurizon.”

Aurizon is Australia's largest rail freight company with services operating across five states. In 2011-12, Aurizon transported more than 250Mtpa of freight with coal representing 180Mtpa.

Aurizon executive vice-president Paul Scurrah said the agreement would be mutually beneficial.

“While we had an existing agreement until 2015, Ensham and Aurizon decided to re-commit to our business relationship now, as the new agreement will generate increased value for both parties,” Scurrah said.

“Under this new arrangement Aurizon can better meet Ensham’s demand for services to align with its mine production in both the short and long term,” he added.

The new agreement will go into effect from April.

This announcement continues Aurizon’s run of sewing up Queensland coal rail haulage, after the company last week announced the signing of a new long-term, performance-based coal haulage contract with Xstrata Coal’s Rolleston mine.

The contract with Xstrata supports the expansion at Rolleston from the current 9.4 million tonnes per annum to 14.6Mtpa starting in December 2014, with provision for Aurizon to haul expanded output volumes up to 20Mtpa.

Aurizon moves more than 500,000 tonnes of coal every day and is the world’s largest rail transporter of coal from mine to port for export markets.

Aurizon operates and manages the Central Queensland Coal Network, one of the world’s largest and most complex supply chains, made up of 2670km of heavy haul rail infrastructure.

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