Shareholders in the troubled Wiggins Island Coal Export Terminal (WICET) in Gladstone, Queensland are considering a buyout proposal from a consortium featuring rail operator Aurizon, Macquarie Bank and Brookfield.
WICET has been hit by a decline in throughput from some of its source mines and the collapse and/or withdrawal of two of the eight original shareholders. It is due to pay down A$3.5B of debt by September 2018, prompting major shareholder Glencore and partners to seek refinancing arrangements.
The Aurizon-led group has proposed a particularly complex deal, which would see Macquarie and Brookfield acquire Glencore’s Rollerston mine and Wesfarmers’ Curragh mine, both in the Surat Basin, while Aurizon would buy the terminal and associated infrastructure.
“The consortium proposal would secure long-term volumes for WICET,” Aurizon said. “In addition, through restructuring and the proposed introduction of lower, market-competitive port charges, there would be incentive for miners to increase throughput at the port. This could also incentivise expansion tonnages from existing mines and new mines.
“Aurizon, which operates rail infrastructure and train haulage services for coal customers in Queensland’s Bowen Basin, sees strategic alignment with the acquisition of WICET. If successful, the consortium’s proposal would provide a long-term, sustainable and economic solution for this important state and national infrastructure asset,” the company said, while stressing that discussions with all interested parties were at an early stage.
Aurizon invested A$750M to connect its existing rail network to WICET, which opened in 2015 with initial capacity of 27 Mtpa and approval to expand to 80 Mtpa. The failure of projected volumes to ventuate, and the nature of access and pricing regimes determined by the Queensland Government during the coal export boom, have meant WICET is obliged to charge users aroundA$23/t, compared to the nearby stateowned Gladstone Ports Corporation’s RG Tanna terminal’s A$5/t.