Re: QR going national?

[Ian Harvey <ian_harvey@do.not.spam.me>]

Switched On wrote:
> 
> < Tell > <telljb@OZozemail.com.au> wrote in message
> 38032ee2.2140608@news.ozemail.com.au">news:38032ee2.2140608@news.ozemail.com.au...
> > "Switched On" <yaropolk@hotmail.com> wrote mobs of
> > stuff about why QR is perfect:
> 
> > The ONLY thing that has kept QR afloat is the
> > exorbitant prices it charges to haul coal.
> 
> Exhorbitant? If they are exhorbitant, how come Queenslanders pay less for
> their electricity than anyone else in the country? Hmm? If our coal haulage
> prices are higher than anyone elses or are uncompetitive, then why is this
> the case? Are our mines selling coal to the electricity boards cheaper than
> any other state? Mines are mines, they don't grossly undercut each other
> because it would pull the plug on the market, and no one wants that to
> happen. I would put it to you, quite seriously, that the reason why  QR
> makes so much money out of coal is because it has a very efficient and
> businesslike operation, and any other competitor is welcome to try, but they
> won't last long without the kind of specialised knowledge that QR has in
> this area.

Qld power is cheap because the state has a significant chunk of the
world's quality steaming coal reserves in the Bowen Basin, not because
it has efficient rail systems.  These days most of the new base load
power stations are connected to a dedicated coal mine by conveyor (e.g.
Tarong).

QR may well have efficient coal haulage but unfortunately I doubt these
efficiencies are passed onto the coal mining companies as reduced
freight rates.  There's a historical reason.  When the large, efficient
Bowen Basin mines started to produce coal it looked like it would be the
death of the existing coal mining industry in the Ipswich area.  In
order to give the Ipswich coal mines a chance the state govt of the day
substituted higher freight rates for part of the royalty payments across
the industry.  This benefited the Ipswich mines which were closer to
port than the Bowen Basin mines and has continued to present day despite
most of the Ipswich mines closing anyway.

In short, the Qld Govt use high coal freight rates to collect royalties
from the mines.  Read a few annual reports for the major coal companies,
and you'll find its a point that they've been squealing about for
years.  Royalty collection is fair - hiding it as freight charges is
not.  One advantage though is that it has given QR the resources to
build the best public owned railway system in the country (I am a little
biased here :).  

As for competition, BHP and Rio Tinto both have extensive experience
with heavy haul rail systems for bulk commodities within Australia. 
There are differences (density of coal versus iron ore, rails are a bit
closer together) but nothing that seems too dramatic.  I imagine that
they would be absolutely delighted with the opportunity to set up their
own rail operations for their coal mines in Qld.  However I suspect that
their mining lease agreements with the state govt prevents it, granting
QR a monopoly.

<snip !>

-- 
IanH
Comments and questions welcome at ian_harvey at bigpond dot com
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