Logistics, Ports & Terminals, Mining and Heavy Industries

Holy GRail: Bidders line up for Glencore rail unit

Coal. Photo: Shutterstock.

Australia’s three major coal carriers are all reportedly in the running to acquire Glencore’s Hunter Valley rail business, known as GRail.

According to a report in the AFR this week, Aurizon, Pacific National and Genesee & Wyoming have each entered a bid for the rail unit, which is reportedly worth around $1 billion.

Pacific National’s bid is thought to be highly dependent on the result of the ongoing breakup and takeover of its parent company, Asciano.

The Fairfax paper also believes at least one Chinese bidder will have made a bid for GRail, which Glencore said it wanted to sell in March this year.

Glencore has been selling off chunks of its business for several months, as it is looking to cut further into its significant debt pile amidst slumping commodity prices.

Its rail business, known as GRail, includes a nine train fleet on the market, and contracts to haul most of Glencore’s 51 million annual tonnes of coal from the Hunter region.

According to a Reuters report in March, the rail business’ selling price will be influenced by the charges Glencore negotiates for hauling its coal on GRail trains after the business is sold.

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