The new line would be an alternative to the Qld Government-owned Mount Isa line. Photo: Queensland Rail

NEW ZEALAND-based Chatham Rock Phosphate has commenced a feasibility study to develop a railway to connect its Korella North Mine and planned phosphate export facility to the Port of Karumba.

Named RailPhos, the project would involve the building of the long-mooted Cloncurry-Normanton rail line in north-west Queensland with an extension to Karumba.

Chatham hopes this line could also be utilised by other phosphate projects in the region searching for economic ways to get product to port.

If progressed, RailPhos would be an all-weather operation to enable up to 10 million tonnes per annum of phosphate through the Port of Karumba.

The Korella North Mine is adjacent to the existing Phosphate Hill-Port of Townsville rail line which would connect at Cloncurry to the new Cloncurry-Karumba rail line.

Korella North is one of several phosphate projects underway or planned in north-west Qld, and the only mine capable of loading directly in bulk on to rail.

Phosphate companies currently with no access to bulk phosphate rail transport options are: NW Phosphate; Centrex; Avenira; Australia Venus Resources, and Golden Cross Resources.

In a statement published to the NZ stock exchange, Chatham said the “only economical means of exporting phosphate” was via bulk rail transport and transshipment through the Port of Karumba into panamax and larger ocean-going vessels anchored in the Gulf of Carpentaria.

“RailPhos would provide a bulk rail solution for CRP’s Korella North Mine and Korella South projects at Phosphate Hill…which will also enable other phosphate miners to export in bulk utilising the common-user facility in the Port of Karumba,” the statement said.

“Chatham is engaging with potential customers in China/Indonesia, rail construction companies, railway operators, landowners, construction material providers and existing /potential phosphate miners inviting them to participate as potential joint venture partners in RailPhos.”

The company said the feasibility study would establish the scope, cost and program for delivery of railway track and rolling stock to build and operate RailPhos.

It would include consideration of government approvals, funding and title requirements for the rail corridor and other assets

To enable third-party users of RailPhos, the feasibility study will also consider the establishment of common-user bulk rail loading facilities at Mirri for  Korella North, Phosphate Hill, Mt Isa, and Duchess.

Existing rail concerns

It is proposed that the line would be private funded and owned, as opposed to the Qld Government-owned Mount Isa line which currently handles phosphate freight.

The cost to access the line, paid to operator Aurizon, was cited as a key factor leading to the collapse of Centrex’s Ardmore phosphate mine earlier this year.

The cost of transporting phosphate to Port of Townsville on rail had also proved prohibitive for many newer mining operations.

In response to the Ardmore situation, the Qld Government last month announced an incentive aimed at reducing rail access charges for eligible rock phosphate loads.

“We have swiftly implemented additional cost relief measures, hoping to assist in the mine’s recovery and the resumption of operations,” Queensland Rail’s head of regional Scott Cornish said.

“The incentive – a substantial discount linked to the rock phosphate commodity price – has been extended to the current rail operator and administrators, enabling them to pass on the savings to rock phosphate rail customers, significantly reducing their annual rail access costs.”

Minister for Natural Resources and Mines Dale Last said these measures would “take the pressure off new and existing rock phosphate rail users while they develop their operations”.

“Global demand for phosphate is strong, and North West Queensland is well positioned to benefit,” Mr Last said.

“We’re taking action to ensure emerging producers get the support they need to scale up.”

Port of Karumba plans

Also in May, Townsville-based consultant group Regional Economics Advisory hosted a workshop to discuss a sustainable development plan for the Port of Karumba.

Managed by Far North Queensland Ports Corporation and trading as Ports North, Port of Karumba currently handles general cargo, fuel, fisheries products, and the export of live cattle.

It also acts as a transhipment port for Mornington Island, other Gulf communities and the Port of Weipa.

The workshop also involved representatives from Gulf-Savannah Development Inc, Ports North, Carpentaria Shire Council and logistics company, Qube Bulk, which has partnered with Chatham on the project.

Chatham is currently negotiating with Ports North to lease land at Karumba to enable exports of 200,000t per annum of lump phosphate.

The company is also planning an on-ground storage area of up to 30,000t from where product would then be conveyed to barges for movement from the port by tugs to vessels anchored in deep water in the Gulf of Carpentaria.

Source: Chatham Rock Phosphate, Queensland Government