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BHP says rail charges are hurting coal miners

BHP is concerned a "price premium" on Aurizon's central Queensland rail network will hurt their cost competitiveness.

In a submission to the Queensland Competition Authority, published this week, on the way third parties can access Aurizon's central Queensland network, BHP said rail charges were hurting coal miners.

"Queensland coal sector has made substantial progress reducing its controllable costs. In contrast, Aurizon Network's excessive reliance in its 2014 DAU on commercial negotiations and non-standard terms and conditions to extract a price premium from end users is unacceptable," the submission read.

"Aurizon Network has made no apparent efforts to constrain overall costs."

Aurizon itself made three submissions to the QCA, one each from Aurizon Network, Aurizon Operations, and Aurizon Holdings.

Aurizon Network said in its statement it had worked closely with industry body the Queensland Resources Council to create a fair pricing mechanism.

BHP also expressed concern about the Wiggins Island Rail Project cost "socialisation".

"As an existing Blackwater system customer (BHP) is concerned that there should not be any socialisation of Wiggins Island Rail Project costs within the existing Blackwater and Moura asset bases where this would have the effect of passing on Aurizon Network's asset stranding, credit or volume risks to existing customers," the submission said.

"This is of particular concern where Aurizon Network has apparently extracted additional returns on WIRP from Wiggins Island Coal Terminal foundation customers."

It said charging pricing principles established with the QRC would ensure current rail network customers would not be charged more, and new customers have certainty.

The QCA draft undertaking will set out the terms under which third parties can utilise Aurizon's central Queensland network.

- APN NEWSDESK

Topics:  bhp coal mining rail



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