www.ara.net.au

ABN 64 217 302 489

Heavy Haul Rail in

Australia

Danny Broad, CEO ARA

24 August 2016

www.ara.net.au

Contents

• ARA Update

• Heavy Haul in Australia – Iron Ore

• Heavy Haul in Australia – Coal

• Heavy Haul – Overseas

• Inland Rail

• National Rail Vision

• Q&A

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The ARA• Who we are:

o A member-based association recently transformed to better represent the interests of the rail industry that contributes to a liveable and sustainable society that benefits all.

• What we do:

o Engage with industry representatives, key stakeholders and decision-makers to address high level matters for the long-term stability and growth of the rail industry.

• Promotes the need for:

o A national integrated freight supply chain network; and

o Reduction of congestion in our cities by growing an integrated, efficient and safe passenger rail infrastructure network.

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Four core member groups

Passenger FreightManufacturing

& SuppliersContractors

ARA Board

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6TH Largest Rail Network Globally

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OUR ANNUAL CUSTOMERS...

1.3 billion tonnes

of freight

627 million heavy

rail

journeys

810 million customer journeys

183 million

light rail

journeys

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HEAVY HAUL

Keeping Our Economy Moving

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Advancements in Technology!

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Coal

Ore

Sugar

Bauxite

Grain

Other Bulk

Grains 3-4%

Bulk Commodities

931 million tons

Non-Bulk Commodities

20 million tons

Rail Freight

Rail Freight moves around 1.3 billion tons of freight p.a.

CoalOreSugarBauxiteGrainOther Bulk

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Rail freight – Iron Ore and Coal

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Iron Ore – World Class Rail System

• The majority of Australia’s iron ore is exported and virtually all of this is shifted to port by rail.

• Largest flows are in the Pilbara, with over 94 per cent of Australia’s iron ore exports

• Ore trains are amongst the heaviest and longest in the world

Rail is the most cost effective means of transporting the commodity from mine to port.

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WA MAJOR IRON ORE RAIL

OPERATORS

OPERATOR FLEETS TONNAGES

BHP Iron Ore 178 SD70’s 2017 guidance between

265mt and 275mt

FMG 15 DASH 9’s

21 SD 70’s

17 SD 90’s

169 million tonnes

FY15/16

Pilbara Iron (Rio Tinto) 72 DASH 9’s

120 EVO’s

6 C44’s

2017 guidance between

330mt and 340mt

Roy Hill 21 EVO’s Targeting exporting

55mt pa

Brazil’s Vale - 2016 forecast of 240mt

to 250mt

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Downer/EMD SD70ACe Locomotives

• 4500 brake

horsepower

• US EPA Tier 2

exhaust emissions

compliant

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UGL/GE Evolution Series Locomotives

• Uses GE’s latest GEVO engines

• 4,400 horsepower

• 40% less emission

• Improved fuel efficiency

• Longer overhaul intervals

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Commodity Price – Iron Ore

Challenges –

Cost

reduction,

sweat the

assets and

seek

innovative

technological

solutions

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Coal – Rail is the Key

• Australia’s principal coal haulage is on the Central Queensland Coal Network and on the Hunter Valley coal railways

• There are 22 varieties of coal in the Hunter Valley

• Coal haulage is primarily undertaken by Pacific National and Aurizon, with notable haulage by Freightliner Australia, BMA and Southern Shorthaul Railroad

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Major Coal Rail OperatorsLOCATION OPERATORS FLEETS TONNAGES

Bowen

Basin

(Qld)

Pacific National

Aurizon

BMA

40 GT42’s

5 88 Class

3 PH37’s (to be delivered)

42 Electrics

105 GT42’s

45 Electric

63 Repowered Electrics

90 Older Asea/Hitachi electrics

13 Electrics

260 mtpa

Hunter

Valley

(NSW)

Pacific National

Aurizon

Glencore/Freightliner

35 GT46CWM’s

35 GT46ACe’s

15 JT42C’s

15 C44’s

40 C44’s

30 C44’s

169 mtpa

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Downer/EMD GT42 Locomotives

Downer / EMD AC

traction narrow gauge

locomotive

for Pacific National

and Aurizon in

Queensland

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UGL Power Haul Locomotives – PH37

• New diesel engine technology

• AC traction

• Advanced auxiliary systems

• Recently sold to Pacific National

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Chinese Supplied Locomotives for Pacific

National

• Designed and

manufactured by CSR,

China

• Narrow gauge for

Queensland operations

• AC Traction system

• To provide competition

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Siemens Electric Locomotives

Siemens Transportation

AC traction electric

locomotives for Aurizon,

Pacific National and

BMA operations in

Queensland

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Downer/EMD GT46C-Ace Locomotives

• Adjustable ballast:

o 134 tonnes for interstate network

o 139 tonnes for Hunter Valley

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UGL/GE C44 Locomotives

Words by DB

• 4500 horsepower

• 134 tonne and 180

tonne options

• Supplied to Pacific

National (92 & 93

Class), Aurizon (5000

& 6000 Class) and

Glencore/Freightliner

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Commodity Prices – Thermal Coal

Challenges – Cost

reduction, sweat the

assets and seek

innovative technological

solutions, including

software improvements

for increased efficiency

and reduced fuel usage.

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Commodity Prices – Metallurgical (Coking) Coal

Challenges – Cost

reduction, sweat the

assets and seek

innovative technological

solutions, including

software improvements

for increased efficiency

and reduced fuel usage

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Heavy Haul – continuing to lead

• The Australian heavy haul rail industry continues to lead the world.

• Australia continues to innovate:

- improving productivity with longer and heavier trains (highest axle

loads);

- improved port facilities;

- ground-breaking control facilities such as the Rio Tinto project –

driverless trains and trucks in the Pilbara being operated through a

control centre in Perth; and

- software solutions for improved efficiency, optimisation of assets

and reduced cost.

• Becoming an even more efficient supply chain for the export of coal and iron

ore is fundamental to Australia’s productivity.

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HEAVY HAUL OVERSEAS

Rail freight in the USA is down…

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HEAVY HAUL OVERSEAS

… Most of that drop is due to coal

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HEAVY HAUL OVERSEAS

Robust expansion of Freight

and Passenger Networks in

Saudi Arabia

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HEAVY HAUL OVERSEAS

Saudi Arabia

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• 1700km route

• Melbourne to Brisbane, bypassing

Sydney

• $10 billion

• < 24 hours transit time

• Allows for 1,800m double-stacked

trains

• Removing thousands of trucks

from roads

• Boosting regional development

• Opens up coal haulage to

Brisbane Port

• Frees up rail capacity in Sydney

Inland Rail

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Draft National Rail Vision and Work

Programme

• Australian State and Territory Governments developing for consideration by the Transport and Infrastructure Council in late 2016

• Key reform areas:

o Access, pricing and interoperability;

o Safety and incident regulation;

o Environmental regulation, planning and corridor protection;

o Funding and investment; and

o Performance measurement and management.

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Heavy Haul – Australia leading the world

In 2001 BHP Billiton trialled

an iron ore train that had 682

ore cars, 8 locomotives, was

7.35km long and hauled

99,734 tonnes

Any Questions?