BHP will consider moving some of its freight away from Aurizon when contracts expire.
BHP will consider moving some of its freight away from Aurizon when contracts expire.

BHP calls for Aurizon to be brought to heel

BHP has called for the Government to legislate future powers to enable Queensland Competition Authority to bring Aurizon to heel.

The mining industry has claimed Aurizon has a gun to the head of coal companies in the dispute that threatens up to $4 billion in coal exports, but it's the first time since the introduction of the mining tax by the Rudd government that the industry has rallied to fight off a threat.

Asset president of BHP's coal joint venture in Queensland Rag Udd said Aurizon was "applying duress to our customers'' and that the issue was at an impasse with neither side willing to budge.

"Aurizon will need to reconsider its position because the likelihood of coal companies sitting down to negotiation under duress is slim to none,'' Mr Udd said.

The stalemate should not occur when prices for coal were at high levels and capable of generating billions of dollars for the coal producers and the State Government through royalties, he said.

 

Rag Udd, asset president of BHP’s coal joint venture in Queensland.
Rag Udd, asset president of BHP’s coal joint venture in Queensland.

An estimated 20 million tonnes of coal exports are threatened by an Aurizon decision to alter its maintenance of the central Queensland coal network.

That strategy followed draft decision from the Queensland Competition Authority drastically reducing the amount of revenue Aurizon could make from the monopoly track.

"In this market is that where Queensland wants the coal industry sitting? Particularly given the ability to bring forward revenue and taxes, I suggest we would be much better placed to be at the other end of the spectrum,'' Mr Udd said.

"It's probably going to take a bit of give and take (to solve this). I do think that the powers that are necessary to ensure these things don't happen in the future are vital for us.''

He said BHP would consider moving some of its freight away from Aurizon when contracts expired.

Aurizon said it took its regulatory responsibilities seriously.

"Aurizon has been on the public record countless times saying the current regulatory process is excessively late, overly bureaucratic and lacking commercial orientation,'' a spokesman said.

A State Government spokeswoman said all parties should focus their efforts on working towards an outcome within the existing regulatory framework.

"Once the current process is concluded, government will consult with parties about ways the process could be improved," she said.