In Australia, a group including BHP Billiton has reportedly raised its bid for QR National, the
state of Queensland’s coal freight network. The bid now stands at A$5.2 billion, though there
has been no comment from the state. “The government is not going to comment on
ongoing commercial negotiations,” Andrew Fraser, treasurer of Queensland, the nation’s
biggest coal exporter, said.
BHP, the world’s largest mining company, Xstrata Plc and the 11 other producers are
seeking control of the tracks as demand from Asian steelmakers expands and congestion
crimps exports. The group, which increased its initial offer from A$4.85 billion, wants
Queensland to allow it to study the rail unit’s books before the federal election scheduled
for 21 August.
“The government is determined to secure the best deal for taxpayers and the long term
interests of the Queensland economy,” Fraser said. “As such, preparations continue for an
IPO in accordance with our original timetable.”
State-run rail provider QR Ltd., with assets worth A$12 billion, last month split into
Queensland Rail, comprising passenger trains and services, and QR National, the nation’s
largest transport and logistics business, including coal and freight train services, ahead of the
planned IPO. The initial share sale may raise A$3 billion.
Queensland Rail has met with about 60 potential initial sale investors in the U.S., Canada
and Asia, the company said last month. The Queensland government’s planned IPO is for
Queensland Rail’s tracks and trains, while the mining companies’ bid is for the rail network
The mining group, which accounts for 98% of Queensland’s export coal industry, plans to
spend A$2.05 billion on the railroad and has arranged a loan of A$1.35 billion for the bid.
Taking control by the group would eliminate the risks of an independent operator raising
fees on the monopoly asset.
Prices for coking coal, a steelmaking raw material, will peak in eight years after which a
market deficit will be plugged, Metal Bulletin said in June. China and India, the world’s most
populous nations, will account for 70% of coking coal demand by 2020, Metal Bulletin said in a