Aurizon announced in its annual results today two important developments for the QLD and WA economies. From Reuters:
Aurizon Holdings said it would be tough to sign off on plans to build new rail lines if coal and iron ore prices remain weak, and held out the prospect of instead returning capital to shareholders.
…Hockridge said if iron ore prices remain around $60 a tonne, it would be difficult to justify building the West Pilbara project, but the companies would be looking at a 16-year timeframe and consider factors like a weaker Australian dollar in evaluating whether to go ahead.
“Clearly the sort of price levels that we’re seeing at the moment would be challenging. No one would deny that,” Hockridge said.
He also played down the chances of the GVK Hancock rail line going ahead anytime soon, with GVK and Hancock still negotiating with each other and Indian banks over terms that would be acceptable to Aurizon. GVK Hancock has given no timeline for a final decision but had hoped to start producing in 2017.
Readers will know my long term view of these projects, both of which are no more than neo-communist boondoggles that will create jobs in one mine only to close them in other more efficient mines.
Pretty stupid stuff pursued by Comrade’s Campbell and Colin and good to see Aurizon sobering up.