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Rail freight operator Aurizon will withdraw an application for funding to assist with a rail project integral to the development of the controversial Adani coal mine in Queensland's Galilee Basin.
Aurizon’s managing director, Andrew Harding, said although the company was in discussion with several entities hoping to develop mines in the vast thermal coal basin, it had not progressed to “definitive contractual arrangements with any proponent”.
“Our NAIF (Northern Australia Infrastructure Facility) application is, in part, predicated on having customer contracts secured. Given this is unlikely to occur in the near future, we believe it is prudent to withdraw the NAIF application," he said.
“If market circumstances change and our discussions with potential customers progress to commercial arrangements, we will look at all possible financing arrangements to develop the rail solution.".
The Aurizon decision, revealed in a statement released on Friday morning, is a blow for the controversial Adani coal mine project.
But Mr Harding said Aurizon remained in favour of the development of the Galilee Basin.
“When developed, it has the potential to provide a major boost to the national economy and create thousands of jobs in regional Queensland,” he said.
“We believe Aurizon can play a key role in helping facilitate a multi-user, open-access rail solution for the various new mines in the region."
The Adani mine has won state and federal environmental approvals, however, federal Labor opposition has strongly signalled it will oppose the proposed mega-mine.
In a statement on Friday Adani expressed confidence in its project.
"The Aurizon NAIF application doesn't impact the Carmichael project. We're focussing on early works and confident of progressing," the statement said.
In March 2017 Aurizon had submitted the first stage of an application for a NAIF loan to facilitate its "Rail Solution" for the Galilee Basin.
It had proposed an upgrade to an existing railway corridor running to the Abbot Point coal terminal on the Queensland coast, combined with a new railway line that would service new Galilee Basin mines and that would connect with Aurizon's existing rail line.
In its 2017 Sustainability Report Aurizon said its analysis indicated this proposal would have "a number of benefits compared to an alternative (standalone) greenfield proposal".
Aurizon said its plan required significantly less taxpayer funds, lowered the project risk, lowered total capital cost, significantly reduced land acquisitions and avoided the lengthy duplication of rail corridor.
Aurizon is a huge rail freight operator. The overwhelming majority of Australian coal that is sent to export markets is transported within Australia on either Aurizon trains or Aurizon tracks.
The news from Aurizon comes a day after the chief executive of Orica, Alberto Calderon, expressed support for the Adani coal mine while attending a business lunch in Melbourne.
“I hope it goes ahead,’’ he said, in comments to media shortly after making a speech at the lunch.
“It would be wonderful it it goes ahead."
Earlier, Mr Calderon told the Melbourne Mining Club lunch that Australian thermal coal had a “solid future” over the next decade.
He also said developing countries had a right to develop.
“There’s still a billion poor people without electricity. And getting them the most affordable electricity, if it’s from thermal coal and good-quality thermal coal like from Australia, is a good thing,” he said.
This article first appeared on www.smh.com.au
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