20/08/2008 - 22:00

$14bn rail, smelter plan gains traction

20/08/2008 - 22:00

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$14bn rail, smelter plan gains traction
HAVING gained support from 19 steel producers, a Queensland-based consortium is pushing ahead with plans for a $14 billion, 3,300-kilometre rail line from the Pilbara to Queensland with industrial smelter hubs at each end. The company behind Project Iron Boomerang, East West Line Parks Pty Ltd, says the steelmakers have signed three-year confidentiality agreements to learn more about the project. It’s also believed the steel companies will make a $US10 million towards a bankable feasibility study, and in return will receive equity and “positions of influence” within the proposed equal-share consortium. The feasibility study is expected to cost $172 million and take just more than two years to complete. East West Line Parks managing director Shane Condon said the project was designed to make transportation more efficient. “The way we generally export iron ore (and coal to some extent) is very inefficient; it’s 60 percent iron and 40 per cent dirt,” he said. “Then the ships come back empty, and the trains return [to mine] empty. We’re talking about the world’s biggest ships, trains and ports. About 45 per cent of the total trip cost is the empty return.” The total cost of the project is estimated at $US45 billion with the construction and commissioning phase estimated at $US12.4 billion, inclusive of $7.2 billion for the rail line, $2.2 billion for rolling stock and $3 billion for industrial land. The company anticipates a commitment to the study by the end of the year, with construction to start in 2010-11. The project aims to produce pig iron from 12 blast furnaces, six on each coast, and then export it overseas, rather than iron ore and coal both being shipped overseas to produce steel. Mr Condon said the project was expected to create 35,000 construction jobs over three years and 8,000 permanent jobs at each end. “It is a project not only for the boom times, but also for the ordinary and even the bad times. It can become a global project and example for all our future generations,” he said. The company plans to hold investor presentations in China, India, Japan, South Korea and Taiwan in the next few months. Rebecca Lawson

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