UNDER PRESSURE: Queensland's coal exports are expected to come under pressure if a new draft ruling comes into effect.
UNDER PRESSURE: Queensland's coal exports are expected to come under pressure if a new draft ruling comes into effect. Tony Martin

Coal ruling to cost billions

A RULING from the state competition authority will have a bigger impact on Queensland's exports than Cyclone Debbie, costing about $4billion and chopping up to $500million from royalties paid to the State Government.

Aurizon said the Queensland Competition Authority's draft ruling on the central Queensland coal network will impact how and when the company carries out maintenance on the track and potentially force more shutdowns on the rail line which takes coal to the ports.

The impact would be "unnecessarily huge'' wiping out about $1billion in Aurizon's pre-tax earnings over four years. Coal producers will also be impacted.

Aurizon chief executive Andrew Harding said he had briefed the State Government on the "absurdity'' in the QCA draft ruling.

Mr Harding said the QCA ruling would mean about 20 million tonnes, worth about $4 billion, would not get to the ports.

"It's more than the total impact of Cyclone Debbie," Mr Harding said.

But its move has set up a brawl with coal producers who claim it shows Aurizon was willing to use its monopoly power by acting before a final decision is made by the QCA.

Queensland Resources Council chief executive Ian Macfarlane said the $4 billion loss in export income would cost the State Government about $500 million in lost royalties each year, enough to pay the wages for 7388 teachers, or 7060 police constables or 7430 registered nurses.

"The QRC is calling on Aurizon to step back from its decision and is seeking reassurance from them to instead engage constructively with the regulator to review any concerns with maintenance,'' he said.

QEAS economist Nick Behrens said the impact on royalties paid by coal companies was likely to be about $210 million.

The Aurizon move follows its decision last week to shelve its plans for a Galilee Basin rail line because it could not get a commitment from any of the proponents.

Mr Harding said that decision was not based on the demand for coal.

"I don't think there is anything particularly doomed about the Galilee. I remain supportive of it being opened up. Demand is absolutely there," he said.

QCA monitors pricing practices of the state's monopoly businesses like the coal rail network.


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