A REOPENING of the Leigh Creek-Port Augusta rail line could be on the cards if a study being undertaken by NeuRizer Limited delivers findings deemed favourable by the South Australian Government.
“This is an important step on the path to production of urea at Leigh Creek as it will enable-cost effective, efficient transport of our carbon-neutral urea fertiliser to both the export and domestic markets,” NeuRizer managing director Phil Staveley said.
“For domestic markets, it will result in lower costs for our customers whilst simultaneously offering a higher realised price to NeuRizer.”
The rail line is around 250 kilometres in length, and went out of use in 2016, following Alinta’s 2015 closure of the Leigh Creek mine.
NeuRizer is proposing to either buy or lease the line, which reverted to SA Government ownership upon expiry of its lease to Flinders Power, which burnt brown coal from Leigh Creek at its now-demolished Port Augusta power stations.
The SA Government has granted NeuRizer a six-month period of exclusivity to prepare a business case to enable the government to undertake an assessment of the company’s proposal.
This is based on the line being used to initially carry 1 million tonnes of urea per annum from the NeuRizer Urea Project to Port Augusta, the central point of the national rail network, for further distribution in Australia.
NeuRizer is currently planning for its domestic distribution to be performed entirely by rail.
This plan will enable NeuRizer to retail to customers rather than wholesale to resellers, which is seen as having potential to offer significant savings to farmers, as well as significantly increasing NeuRizer’s margin.
The NeuRizer site is on the Leigh Creek rail line, and aims to be the only fully integrated urea production facility in Australia, with all inputs – namely gas, power and carbon dioxide – for urea production being located on site.
This means NeuRizer can expect to control both supply and price of these major cost inputs, regardless of prevailing market conditions and supply chain dynamics.