The Australian Competition and Consumer Commission (ACCC) has approved Australian rail haulage firm Aurizon's acquisition of One Rail Australia (Ora), subject to it selling or demerging Ora's coal haulage business in the Hunter valley region of New South Wales (NSW) and in central Queensland.
Aurizon plans to complete the A$2.35bn ($1.59bn) acquisition by the end of July and then immediately launch a dual track process for both a demerger and a trade sale of the east coast coal haulage business.
"Without the divestment of One Rail's east coast business, the ACCC considered that the proposed acquisition would reduce the number of main competitors in the supply of coal haulage in NSW and Queensland from three to two, likely resulting in higher prices or decreased service levels," ACCC chair Gina Cass-Gottlieb said.
Ora's east coast rail business has annual revenue of around A$240mn and a long-term rail haulage contract to 2036 with Switzerland-based trading and mining firm Glencore. Its coal haulage business transports around 50mn t/yr of coal, with the Glencore contract representing about 85pc of the projected volumes.
The purchase of Ora and the sale of its coal business marks an overall shift away from coal for Aurizon, which started as part of Queensland Rail hauling coal from mines to ports in Australia's largest coal-producing state. The deal will increase Aurizon's exposure to iron ore, base metals and grains.
Ora, formerly Genesee and Wyoming Australia, first bought into the east Australia coal industry when it acquired Glencore's coal haulage business Glencore Rail in NSW.
