Aurizon CEO must explain actions after Japan steel makers warnings

21 May 2018

Statement by Queensland Resources Council Chief Executive Ian Macfarlane

Aurizon Chief Executive Officer Andrew Harding must explain why he ramped up the dispute with the Queensland Competition Authority (QCA) after Japanese steel makers raised concerns about his company’s actions to restrict the movement of metallurgical coal from central Queensland mines to export ports.

The Courier-Mail report today that during Mr Harding’s visit to Japan last month that “questions had been raised by the powerful Japanese steel mills over the issue”, yet Aurizon initiated Supreme Court action against the Queensland Competition Authority four days later.

This is the most reckless, anti-Queensland behaviour I have seen from a Queensland-based CEO, particularly from one that has a monopoly and is not prepared to work with its customers.

When he was in Tokyo on 26 April, Mr Harding told Japan industry representatives that Aurizon was “seeking to engage directly with our customers and supply chain partners on the range of issues contained in the Draft Decision. We are working towards an outcome that is better aligned with the long-term interests of the Queensland coal industry and the economy more broadly.”

In fact, Mr Harding and Aurizon have failed to engage their customers – the coal-mining industry – and four days later (30 April), Mr Harding and Aurizon referred the matter to the Supreme Court of Queensland.

The Queensland coal industry, the Queensland Government, Japanese steel makers, Aurizon staff and investors are all scratching their head about Mr Harding’s actions.

Japan is Queensland’s second largest export market and it has been a key partner for our State’s resources industry for more than half a century – a key customer and investor.

At a time when the industry and the Queensland Government is striving to increase exports and jobs, Aurizon is actively working against our efforts.  Aurizon and Andrew Harding are working against Queensland.

At a time when the industry and the Queensland Government has urged Aurizon to respect the independent QCA processes, it has snubbed its nose at the regulator and introduced draconian measures to stifle industry and damage the Queensland economy.

The loss of 20 million tonnes would reduce Queensland exports by up to $4 billion and cut royalties payable to the Queensland Government, to reinvest in infrastructure for all Queenslanders, by up to $500 million.

Our company members are ready and willing to supply the metallurgical coal Japanese steel makers needs.  Aurizon’s decision to introduce new maintenance arrangements in the Central Queensland Coal Network, that it says will reduce movement of up to 20 million tonnes of coal per annum.

Background

In February, Aurizon announced it would change its maintenance program and that conceded this would impact on the movement of up to 20 million tonnes of coal each year.

Aurizon’s announcement followed the draft decision of the independent Queensland Competition Authority for the operation of the Central Queensland Coal Network.  The final decision is due by QCA at the end of the year.

Instead of waiting for the QCA’s final decision, Aurizon decided to cut train movements for coal.  The Blackwater system, which connects mines such as Rolleston and Minerva to Gladstone, including part of the North Coast Line between Parana and Rocklands, has already been severely impacted.

Link to Aurizon CEO Andrew Harding’s presentation to Coal Investment Seminar presented by Japan Oil, Gas and Metals National Corporation in Tokyo on 26 April

Aurizon announced on 30 April confirming it had referred the QCA Draft Determination to the Supreme Court of Queensland for Judicial Review.

Media contacts

Anthony Donaghy 0412 450 360

Kirby Anderson 0400 206 502