Aurizon confirms talks to buy Wicet coal terminal

PERTH (miningweekly.com) – Australian freight rail operator Aurizon on Monday confirmed that it was in preliminary discussions to acquire the Wiggins Island coal export terminal (Wicet), in Queensland.

Wicet is currently owned by a consortium of Australian and international resource companies, including Glencore and New Hope, and provides 27-million tonnes a year of export capacity from the Port of Gladstone.

The terminal could be expanded to about 120-million tonnes a year of long-term export capacity, from the existing site, once fully developed.

Aurizon on Monday confirmed that it was in preliminary discussions with a number of parties in relation to a restructuring proposal for the terminal, under which Aurizon would acquire Wicet and other consortium members would acquire one or more of the facility’s source mines.

The Australian Financial Review is reporting that Macquarie Group and Canadian investor Brookfield form part of the consortium. The news report states that Macquarie and Brookfield will take over Glencore’s Rolleston mine and potentially Wesfarmers’ Curragh mine, along with other mines in the Bowen basin.

Glencore placed the Rollestone mine up for sale in August. The major responded to the news on Monday by saying that there was “strong interest” from a number of parties for the mine, but that an official agreement has not been made yet, according to the Gladstone Observer.

The Wicet was completed late last year to service a consortium of eight Bowen basin coal producers. However, since the port plan was agreed in 2009 to its completion in 2016, three of the original partners have folded, leaving the remaining partners to shoulder all the debt and port fees.

Aurizon said that the consortium proposal would secure long-term volumes for Wicet, and through the restructuring and introduction of lower, market competitive port charges, there would be incentive for miners to increase throughput at the port. This could also incentivise expansion tonnages from existing mines and new mines.

Aurizon said that it saw a strategic alignment with the acquisition of Wicet, given its own rail infrastructure and train haulage systems in Queensland, adding that if successful, the consortium’s proposal would provide a long-term, sustainable and economic solution for Queensland.