Southern Missing Link takes another step forward

By Robyn Rankin

Despite the current slump in the coal market and pending Emissions Trading Scheme (ETS), the rail link from Toowoomba to Gladstone (linking the Western and Moura rail systems) is on target.
“We are still adhering to the time deadlines set out in our mandate from the Queensland Government,” said Everald Compton, chairman of Surat Basin Rail, a joint venture charged with investigating the development of the open-access rail link through the Surat coal basin.
“That includes completing the business case with financial model by mid 2009, with financial close planned for the end of 2009,” he told The Australian Journal of Mining.
The joint venture is working towards a construction completion target of early 2012. Its partners include; the Australian Transport and Energy Corridor Limited; Anglo Coal; Xstrata Coal; and Queensland Rail.
It has not received any significant opposition to its EIS, with many of the 33 submissions described as “positive”. Among the respondents are landowners, Government agencies and community groups.
Everald Compton said the developers of the project will meet with each respondent to discuss the issues raised in their submissions. And that all landowners with the potential to be impacted upon by the link had been “involved in discussions during the past four to five years”. He added that none of the EIS submissions that he knew of were from a ‘green’ lobby groups.
“Most people in the community are green anyway, because no one wants to bugger up the world,” Compton said.
While he said the current global financial crisis and downturn in coal demand were unfortunate, he did not expect it to impact on the project or its timing.
“Luckily we don't have to put any coal on the train until about 2013 and we expect the coal price to be a lot higher by then,” he said.
“Our best forecasts indicate that the current slump will be all over by 2013 and the world will come out of recession by about 2011.”
He also said the Government’s proposed Carbon Pollution Reduction Scheme and its possible impact on the coal industry was a potential hindrance.
“It depends how they're going to implement it. If it's too big an imposition on the coal industry it will shut down [the industry].
“85 per cent of the world's power comes from coal so if the coal industry shuts down, it will leave the world without power,” he said.
He believed that whatever price must be paid for an ETS should be the responsibility of the power stations that use the coal, not the miner digging it up, particularly as most of Australia's coal is exported.
A submission about the project, estimated to cost about $1 billion, has been provided to Infrastructure Australia (IA), but Compton said it was not asking for a specific amount of funding.
He said guidelines about how IA would hand out money had not yet been revealed, but the details of the project had been outlined to the funding agency.
He said the project would be funded by about 30 per cent shareholder investment, and 70 per cent from debt, secured by “take or pay” contracts where miners undertake to put a certain tonnage on the train each year, guaranteeing the line's revenue.
Those contracts would not be signed until financial close, which he anticipated would happen during the latter part of 2010.
Queensland Coordinator-General Colin Jensen has reportedly said the railway could invigorate Queensland’s economy.
“Enhancing the freight services in this part of regional Queensland could unlock the 4 billion tonnes of thermal coal in the Surat Basin.
“This multi-user, open-access railway could transport up to 42 million tonnes of coal to Gladstone’s ports each year for export while opening up markets for other Darling Downs mineral and agricultural products,” he reportedly said.
For more information visit: www.suratbasinrail.com.au/about-surat-basin-rail.php