Maybe Aurizon was premature getting out of intermodal and putting all their eggs in the coal basket?
There decisions over the past 5 years will come back to haunt their shareholders be sure of that.
There is the investment of https://www.railpage.com.au/f-t11401130.htm which we are not yet aware of how this is going at RP and is it leading to volume?
Where does Aurizon go now for revenue maintenance and growth. A large amount of their revenue is coming from coal. How much of their coal business is Glencore?
We've got to remember coal is many different things, and not all coal is created equal.
Aurizon's rail network carries the world's largest seabourne trade of metalurgical coal - 143-million tonnes in 2018. Metalurgical coal and its carbon content remain the only economic means of smelting iron ore into the carbon iron alloy known as steel. Most steel mills from India through to South Korea and Japan, and to a lesser extent China, rely on the metalurgical (coking) coal transported by Aurizon or on its network. By comparrison, NSW produces just over 25-million tonnes of metalurgical coal. Metalurgical coal is Aurizon's trump card and as long as iron ore is being turned into steel by conventional steel mills, Aurizon will have a coal business.
Glencore, more so than most other miners in Australia, is very heavily exposed to thermal coal pricing and demand. While BHP's coal production in Queensland is almost entirely metalurgical, 69% of Glencore's Queensland production is thermal coal. Its recently announced 20-million tonne thermal and coking coal Valeria project near Emerald is designed to increase Glencore's metalurgical coal production as well as allowing it to close more expensive to operate thermal coal mines. Glencore's coal business in Queensland represents around 19.5% of the tonnage moved on Aurizon's coal network by Aurizon, Pacific National, 1Rail and BMA (the later hauls BMA coking coal exclusively).