Logistics, Ports & Terminals, Mining and Heavy Industries

Aurizon, Brookfield, Macquarie in talks to buy WICET: Reports

Nathan Tinkler says Australia is still in a good position in the coal sector, relative to its competition. Photo: WICET

Aurizon has confirmed it is in talks to buy the embattled Wiggins Island Coal Export Terminal as part of a consortium, in a bid that could be worth as much as $4 billion.

An ambitious plan to restructure port charges at WICET would encourage throughput, the rail operator said.

Aurizon on November 13 confirmed it was in “preliminary discussions with a number of parties in relation to a restructuring proposal” for the massive coal export terminal, which was built during the peak of the mining boom but has seen several of its key proponents collapse before they were able to export a single lump of coal.

Aurizon did not say who it was in consortium with, but several reports name ASX giant Macquarie Group, and Canadian infrastructure firm Brookfield, as partners. Reports have the deal worth roughly $4 billion.

“As part of a consortium proposal, Aurizon would acquire WICET and other consortium members would acquire one or more of WICET’s source mines,” Aurizon told the ASX.

“The consortium proposal would secure long-term volumes for WICET. In addition, through restructuring and the proposed introduction of lower, market-competitive port charges, there would be incentive for miners to increase throughput at the port.

“This could also incentivise expansion tonnages from existing mines and new mines.”

The bold move is the latest major step taken by Aurizon since former Rio Tinto executive Andrew Harding became its chief executive in December 2016.

According to reports, the deal would see WICET’s remaining senior lenders – who are still owed $3.5 billion – repaid within 10 months by the consortium. Without such a move, major banks – including ANZ and NAB – may be forced to write down as much as $1 billion of that debt.

“Aurizon, which operates rail infrastructure and train haulage services for coal customers in Queensland’s Bowen Basin, sees strategic alignment with the acquisition of WICET,” the company said.

“If successful, the consortium’s proposal would provide a long-term, sustainable and economic solution for this important state and national infrastructure asset.”

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