A consortium of coal miners has bid A$4.8 billion (approximately Ôé¼3.2 billion) for AustraliaÔÇÖs biggest coal railroad in an attempt to see off the governmentÔÇÖs planned IPO of the track network and coal haulage business.
The group of 13 miners, called the Queensland Coal Industry Rail Group (QCIRG), which is headed up by Australian/UK-based miners BHP Billiton and Rio Tinto, as well as Switzerland-based Xstrata, is concerned that if both the tracks and trains are sold together, a new private owner would hold a monopoly over the coal industry.
The Queensland government is selling its state-owned railway, port and forestry assets in order to try and raise A$15 billion to help reduce the budget deficit.
The minersÔÇÖ group accounts for 98 per cent of QueenslandÔÇÖs export coal industry.
QCIRG said that the offer represents a substantial premium on what the government is likely to achieve via an IPOÔÇöwhich if held, would rank as AustraliaÔÇÖs biggest this year.
The QCIRG offer is for the Central Queensland track network, covering four systems and the Goonyella to Abbot Point Expansion, which are used predominantly or exclusively by the coal industry. QCIRG plans to spend A$2.05 billion to expand the railroad to meet demand from Asian steel mills.
Australian Rail Track Corp., which manages tracks in three states including the Hunter Valley coal network in New South Wales, would run the railroad, according to QCIRG.
Commenting on the announcement, the chairman of QCIRG Nick Greiner, said: "We have considered the alternative model under the IPO and associated regulation and legislation and strongly believe it does not represent an optimal or even reasonable basis for assuring the future of the State's major export industry.
"The QCIRG offer has four goals: to encourage fair and open access, optimise network performance, enable early system expansions, and encourage rail haulage competition, all with flow-on benefits through enhanced investment, employment and royalties.ÔÇØ
He continued: "The members of QCIRG are committed to expanding the network to support future growth and in addition to the offer, QCIRG has established a facility to fund the current QR capital plan and also further rail capacity growth.ÔÇØ
Greiner said coal producers are "natural owners" of the railroad assets and would be able to invest more in the maintenance and expansion of the infrastructure, instead of private investors who would own the network following the IPO.
Queensland Premier Anna Bligh has said that she will examine the bid but has given no indication as to whether it would be accepted. In March she said that an IPO would maximize the value to the taxpayer. The state had planned to keep a 25 to 40 per cent stake in the network.
