Rail operators stocking up for iron ore haulage
The iron ore boom has contributed to the $250m worth of rail freight orders for UGL, the rolling stock and infrastructure provider said on Monday.
Rio Tinto Iron Ore continues to upgrade its locomotives.
Contracts with leading rail operators and resource companies that would drive its "healthy expansion" for 2010/11 included:
A five-year locomotive service and support agreement with Rio Tinto in Western Australia;
The supply of nine General Electric Evolution locomotives to Rio Tinto; and
The supply of 450 locomotive bogie frames to GE to serve the Commonwealth of Independent States markets.
In addition, QR National's specialist bulk freight subsidiary, ARG, has ordered six C44ACi standard gauge locomotives from UGL Rail in a deal worth more than $35m to expand its operations in the emerging Yilgarn and Mid-West regions.
Our rail business continues to see clear signs of a recovery in sales enquiries, on the back of strengthening resources sector conditions, UGL chief executive Richard Leupen said.
Meanwhile, QR National showed similar optimism. Its managing director and chief executive, Lance Hockridge, said iron ore was a strong growth area for the company as customers in WA expanded or opened mines.
Its new locomotives are due to be delivered in the second half of 2011 to add to the WA fleet.
AGR already operates rail services for the US-owned Cliffs Natural Resources mine at Koolyanobbing in the Goldfields, which last year exported 8mt of iron ore through Esperance, 575 km away.
A spokesman said this was a standard gauge route. In a $30 deal with URG, 227 new ore wagons with 23 tonne axle load targets had been ordered.
Cliffs is one of the 11 Yilgarn mining companies that are talking of sharing infrastructure through a series new rail spurs and exporting through Esperance.
They are roughly equidistant from their alternative of Oakajee, where the deepwater port and standard gauge railway system are still to be built.
Hockridge said ARG has a heads of agreement with Karara Mining to provide rail haulage services from its Karara iron ore project when production begins.
Karara Mining, a foundation customer of Oakjee Port and Rail, is due to begin production in late 2011.
Another ARG customer, Mount Gibson, has a new mine due to begin shipments next year.
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