Aurizon defends its rail tack PDF Print E-mail
Saturday, 15 December 2012 15:51

Emerging WA rail powerhouse Aurizon has hit back at claims its "risk-averse" approach to projects is delaying mining ventures around the state, saying it is "not a benevolent society" for the sector.


The group, which until last month was called QR National, has an increasing footprint in WA, and is in talks with a range of Pilbara miners, including Atlas Iron and Aquila Resources to potentially build and operate railways to get their ore to port.

However, miners, including global giant Rio Tinto, have criticised Aurizon recently for, among other things, demanding contracts that require payment whether ore is shipped or not, and wanting millions in security payments before railways are built.

It comes as the sector is being squeezed by rising costs and miners are looking desperately for ways to shift expenses.

Aurizon managing director Lance Hockridge hit back at the claims, saying it was prepared to take on greater risk if its clients wanted it to, but Aurizon was often the scapegoat for the industry's broader problems.

"We are a rail-based transport and logistics provider, and to the extent our customers want us to take a different kind of risk profile, we are more than happy to do that," he said.

"We have demonstrated (in different areas) that we can do that particularly since (our) privatisation.

"With respect, it is very easy to take a pot shot . . . but I can tell you when all of this infrastructure (particularly in Queensland) was being talked about some of these same players were critical of us for being slow to get this infrastructure in place," he said.

"We are not a benevolent society. . .and we are very focused on efficiency and returns on our business."

Rio Tinto Australia managing director David Peever has been the highest profile critic of Aurizon in recent weeks, telling a conference in Perth that further increases in so-called "take or pay" contracts would be unsustainable.

"Continuing to push price points here and not recognise the competitive position of the sector is a zero sum game," Mr Peever said last month.

"It is worthwhile remembering the old adage - if you think it is too good to be true, it probably is."

Aurizon is currently running the ruler over multiple plans for Pilbara miners.

One such miner, who did not wish to be named, said Aurizon's demand for huge bank guarantees before it would proceed with a venture undermined the rationale for companies to get the third- party rail provider to build their projects.

"We may as well bring it in house," the executive said.

But Mr Hockridge said: "We don't aspire to do everything, and we don't on that basis believe we will do everything.

"But we are working hard to offer viable options in circumstances where we want to play."

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