Aurizon coal dispute threatens the $7 billion trade.
Aurizon coal dispute threatens the $7 billion trade. Contributed

Aurizon coal dispute irks Japanese

JAPAN'S steelmakers have complained that they continue to be annoyed and frustrated by the continuing Aurizon dispute which threatens the $7 billion trade.

The Queensland Resources Council said it met with one of the steelmakers yesterday as the potential cost of the dispute to State Government's royalties blows out by more than $100 million as coal prices grow well above forecasts.

A peace offering from Aurizon of a 10-week moratorium on its controversial maintenance changes was rejected by the industry and a meeting with the State Government to try to resolve the dispute also appears to have failed.

The brawl started when Aurizon implemented major changes to the maintenance of its central Queensland coal network, claiming the decision to do so was forced on it by a Queensland Competition Authority draft decision on how much it could earn from the monopoly track which was $1 billion less that it wanted.

The industry appeared to give some room on Monday when QRC chief executive Ian Macfarlane said that if Aurizon resumed its normal maintenance practices immediately and maintained that until the QCA made a final decision then the coal industry would be prepared to discuss presenting a united position to the Queensland Competition Authority.

The coal producers have been angered by Aurizon's attempts to go outside the QCA system and attempt to negotiate with companies independently.

Aurizon said it's open to a discussion but it has to be about all issues including the rate of return it can have on the track.

The QRC confirmed it had met with one of the steelmakers which had also voiced its concerns to Premier Annastacia Palaszczuk on her trade mission to Japan last month.

"The industry appreciated the efforts of the Premier to try to reassure steelmakers when she visited Tokyo late last month. However, Aurizon have persisted with its threats," QRC chief executive Ian Macfarlane said.

"Aurizon have maintained a pig headed position since. Instead of offering olive branches, all the coal industry has had is the stick from Aurizon.

"Aurizon's treatment of its customers would make Basil Fawlty blush."

QRC estimates the cost of Aurizon's new maintenance plan, which they say will choke off as much as 20 million tonnes of exports a year, would cost up to $4 billion per annum in lost Queensland exports and up to $500 million in lost royalties which pay for the wages of teachers, nurses and police.

"Queensland simply can't afford to keep paying the price of Aurizon's intransigence," Mr Macfarlane said.

The QRC estimates that at the current price for coking coal of $US200 a tonne and the exchange rate the dispute has added an extra $118 million to the previous $500 million in forecast losses.

The State Government has said it doesn't believe the dispute will be as bad as predicted while Aurizon said yesterday its forecast of lost export volumes of 20 million tonnes from the maintenance changes would likely be in foregone sales rather than a reduction in previous totals.