Australia rail group Aurizon warns ruling could hit coal investment
SYDNEY, Sept 30 (Reuters) - Australian rail haulage group Aurizon on Tuesday warned a smaller-than-expected government cap on revenue of A$4.02 billion ($3.50 billion) it can generate from its key Queensland state operations could hurt future investment in the sector.
The Queensland Competition Authority (QCA) has published a draft decision outlining Aurizon's terms and conditions for negotiating coal train services in the central Queensland coal region.
The draft is seen as a victory for coal miners seeking to better control mining and shipping costs in the face of a prolonged downturn in the sector.
Aurizon shares slid 1 percent to A$4.45 against a slightly firmer overall market.
On Monday, Japan's Sumitomo Corp and its partner Vale SA said they would shut down a mine in Queensland by the end of January because of a poor market outlook.
Aurizon, which operates the majority of Queensland's coal railways, submitted an amended submission on August 11 capped at $4.75 billion that outlines the prices it wants to charge miners to use its lines.
The company said it will provide further information and make a case for "robust changes" in the final determination.
"Aurizon Network is concerned about the negative signal this draft decision will send for future investment in the Central Queensland Coal Network, together with the impact it could have on the level of maintenance activities required to provide a safe, reliable and high-capacity network for customers," it said.
Australia's coal miners have become particularly sensitive to costs, with some estimates indicating up to a third of all operations are running at a loss. Continuación...