May 04, 2017

Adani signs $74m steel deal for Carmichael rail link

Adani signs $74m steel deal for Carmichael rail link

Adani Australia will purchase $74 million of railway track from beleaguered South Australian steel group Arrium Mining and Materials for its Carmichael coal mine project.

The contract with OneSteel Manufacturing, a division of Arrium, will be used to construct the 400km North Galilee Basin Rail rail link from Carmichael mine to the company’s bulk coal terminal at Abbot Point near Bowen.

“This is a landmark deal for the Galilee projects,” Adani Australia head of country and chief executive officer Jeyakumar Janakaraj said.

“Adani is continuing to gain momentum.

“The North Galilee Basin rail project is an essential open-access, multi-user element to open the Galilee basin not only for the Carmichael mine but other projects.

“Our commitment to the Carmichael projects – and the benefits that will flow to regional Queensland and India – is clearly demonstrated by this deal. There is more work to be done but this contract is a major step forward.”

The contract, which is subject to the normal commercial requirement that the Carmichael mine proceeds, involves more than 54,000 tonnes of head hardened rail.

It was signed today in Whyalla, South Australia.

That is one of the largest steel orders placed with the Arrium group in recent years and is a potential lifeline for the company, which was placed into voluntary administration last year.

Mr Janakaraj again pledged to source resources from regional Queensland when practical, but held this up as a clear demonstration of the wider national economic benefit.

“There are many other contracts under active consideration which will benefit regional Queensland businesses and generate jobs,” Mr Janakaraj said.

“However, the railway track contract assessment showed the best option for an order of that size was for it to be supplied by the Arrium group.

“Though it would have clearly been cheaper to source the rail from overseas, Adani values supporting Australian businesses and Australian jobs.

“Australia needs a strong local steel industry just as it needs a strong coal and resources sector. Today’s announcement strongly supports both.”

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