Kate Emery, The West Australian March 30, 2012, 6:45 am
QR National has put its foot on a preferred route for a fourth iron ore railway line into Port Hedland in a move that could throw a lifeline to juniors sitting on billions of dollars of otherwise stranded deposits.
The corridor mapped out by QR is understood to pass close to Atlas Iron's Mt Webber, McPhee Creek and southern Pilbara deposits, paving the way for the miner to underpin a business case for the railway.
It would also hand Atlas what it needs to meet its production target of 46 million tonnes a year by 2017.
W _estBusiness _ understands QR has submitted a so-called file notation area with the Department of Mines and Petroleum over a tranche of land in the Pilbara, essentially an expression of interest that is a crucial step towards building what would be the region's first genuine third party railway.
Although the exact route of the proposed railway is not known, QR is unlikely to be short of customers, with the likes of Wah Nam International-Brockman Resources and Flinders Mines obvious targets.
It is understood as little as 12mtpa of iron ore production could underpin a base case railway.
A spokesman for QR would not comment directly on its Pilbara plans but said it had "positioned itself for involvement in the expanding iron ore haulage markets in Western Australia".
"QR has established rail infrastructure capability, an ability to run multi-user railways and a strong balance sheet," the spokesman said.
"We stand as one of the few companies offering that range of railway capability, which we have used for heavy haulage in Queensland for decades. We're constantly in discussions with potential customers requiring rail solutions. However we will not comment on market speculation."
Atlas managing director Ken Brinsden declined to comment on the progress of rail talks but said there was "a lot of merit" in QR's plans.
"There are a lot of independent tonnes in the Pilbara that aren't owned by the majors . . . there's up to 70 to 75mtpa independent port capacity in the inner harbour at Port Hedland," he said.
"When you think about having 70 to 75mtpa of port capacity at the end of the railway, that's a big chunk of business, so I would think any infrastructure provider would look at that and say 'jeez that's a big opportunity'.
"We'd say good on QR National for showing a bit of initiative if that's where they want to go."
