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GENESSEE & Wyoming Australia has expanded two rail contracts with Arrium to haul an extra 2.7 million tonnes of iron ore a year in South Australia.
The move means GWA, which owns the Tarcoola to Darwin railway, will spend $60 million in new narrow gauge locomotives and wagons - as well as a stan-dard gauge rolling-stock maintenance facility.
"We are pleased to be expanding our service relationship with Arrium in South Australia and to be supporting our customers' growth to an annual run rate of 11 million tonnes of export iron ore by mid-2013," said Jack Hellmann, the chief executive of GWA's US parent.
In a statement to the New York Stock Exchange, Mr Hellmann said: 'We are committed to providing world class rail service.
"We look forward to supporting Arrium's expansion to even higher tonnages going forward."
The contracts include a lift in the 6 million tonnes of ore it hauls from Arrium's mines in the Middleback Ranges to Whyalla by more than 2 million tonnes and a lift, by more than half a million tonnes, to the new Peculiar Knob mine, near GWA's Tarcoola to Darwin rail line, to almost 4 million tonnes annually.
GWA has already invested $67 million for nine new locomotives, the last of which was delivered in June this year, and facilities to support shipments from the new mine, which are expected to begin in the fourth quarter of 2012.
Metallic ores were a standout for GWA's performance in the three months to June 2012, rising 41 per cent to 8265 carloads in the quarter, its parent company Genessee & Wyoming reported.
But falls in haulage of farm produce and petroleum products reduced overall traffic growth to 3.5 per cent for the quarter or 55,718 carloads.
The US company operates 65 railroads in 10 regions and rail service at 17 ports in North America and Europe and Australia.
This article first appeared on www.adelaidenow.com.au
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