QR National has taken advantage of booming global demand for Australian coal by striking a deal with eight mining companies to build a $900 million rail line to a new export terminal in Queensland.
The Wiggins Island Rail Project (WIRP) at Gladstone is one of the largest rail expansions in the nation and will be financed by QR National through existing facilities.
Work is expected to start in early 2012 and be completed by March 2015.
It is also the first major rail infrastructure investment since QR National was privatised and listed on the Australian Securities Exchange in November 2010.
QR National chief executive Lance Hockridge said the project was part of a strategy to invest in growth projects involving coal.
The project supports the initial 27 million tonnes per annum of coal to the proposed Wiggins Island Coal Export Terminal (WICET).
The project will allow a 30 per cent increase in the tonnage transported from the Southern Bowen Basin coal region.
It includes the construction of a 13-kilometre balloon loop near Gladstone, upgrades to sections of the Queensland North Coast Line, the Moura System and the Bauhinia branch line, as well as duplication of sections of track along the Blackwater System.
The companies involved include Xstrata Coal, which is the world’s largest exporter of thermal coal, Aquila Resources, Bandanna Energy, Caledon Resources, Northern Energy Corporation, Yancoal Australia, Wesfarmers Curragh and Cockatoo Coal.
Bandanna Energy managing director Dr Ray Shaw said the WIRP agreement was a significant milestone both for Bandanna and other first-stage shippers to the Wiggins Island terminal.
“QR National’s expenditure of $900 million plus for infrastructure is a very strong vote of confidence in WICET and the shippers source mines.
“With this agreement, a key piece of the coal supply chain for Bandanna’s Golden Triangle projects has now been resolved.”
Australia is the world’s leading coal exporter, and black coal is the nation’s largest commodity export and the majority of that comes from Queensland.
However, it was unclear what return QR National would generate on its investment, City Index chief market analyst Peter Esho said.
Mr Esho said he praised the rail projects forecast creation of about 3,000 jobs.
The project is subject to the approval of the Queensland Competition Authority.
QR National shares finished the day flat at $3.26.
