BHP rules out using Maldon-Dombarton line

By Ben Langford
Updated November 6 2012 - 2:45am, first published October 19 2011 - 10:04am
Prime Minister Julia Gillard was in the Illawarra yesterday to announce $25.5 million for the Maldon-Dombarton rail link. Picture: ROBERT PEET
Prime Minister Julia Gillard was in the Illawarra yesterday to announce $25.5 million for the Maldon-Dombarton rail link. Picture: ROBERT PEET

The world's largest miner, BHP Billiton, would not use the Maldon-Dombarton rail line to transport coal from its Illawarra mines to the Port Kembla coal terminal.It is a blow to the forecast demand for the proposed rail line, as BHP Billiton sends seven million tonnes of coal a year to Port Kembla for export.The stance of BHP Billiton - and subsidiary Illawarra Coal - is revealed in consultant ACIL Tasman's feasibility study into the Maldon-Dombarton link.The miner's submission said while it supported the rail link proposal, there was "no likelihood" it would use the line.The feasibility study said that moving output from Illawarra Coal's Appin and West Cliff mines to the new rail line would save $21 million over 20 years in costs associated with road accidents, congestion, road degradation and pollution from road transport. It said the two mines generated 70 per cent of the road freight considered "contestable" by the new line.ACIL Tasman concluded new government measures may be needed to force coal onto the rails, such as making rail freight a condition of a mine's expansion.In Wollongong on Tuesday, Prime Minister Julia Gillard announced $25.5 million to further progress the rail link, but stopped short of a full commitment to completing the project.The feasibility study found there would be demand for more than 12 million tonnes a year of coal on the line, but it would come from mines near Lithgow rather than the Bulli seam operations."There is a strong local interest in reducing the number of trucks, or at least in reducing their growth, on the major arterial roads serving Port Kembla, and a view that a Maldon-Dombarton line would help do that," the study said."The evidence does not support this view. The owner of the colliery that is expected to provide the most significant growth of trucks, BHP, has stated that 'it is neither economically feasible nor environmentally sound to consider a rail connection to the Maldon to Dombarton rail link at this time'."To reduce truck numbers, other policies would be required such as restrictions on mining licences and changes to road user charges."The main reason Illawarra Coal would not use the rail line was found to be the cost of new infrastructure to send its coal about 13km to meet the train."It is neither economically feasible nor environmentally sound to consider a rail connection to the Maldon-Dombarton rail link at this time," the miner's submission said.Yesterday, Illawarra Coal head of external affairs John Brannon said the rail line would have benefits, but the company would not use it."Illawarra Coal remains supportive of the Maldon-Dombarton rail link proposal but cannot make a commitment to the use of such a facility as Illawarra Coal's existing operations are geographically remote from the proposed alignment of the rail link," he said.Xstrata's Tahmoor colliery is considered a more likely candidate to use the line.

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