Rail firm QR National is building a rail system in Queensland that would transport coal from the Galilee Basin to port even if coal mining companies in the area have plans to develop their own rail system.

QR Chief Executive Lance Hockridge said the firm, which was recently privatised, is negotiating with several mining firms for QR to provide the hauling service since the railway plans of these firms differ beyond Abbot Point.

Indian firm Adani is considering running a new line directly east from the Galilee Basin and plans to link it with existing rail infrastructure from the Bowen Basin to the coal port of Dalrymple Bay and another coal port planned for Dudgeon Point.

Mr Hockridge pointed out that since miners plan to start production from Galilee Basin by 2014 it makes more sense for early tonnage to pass through Dalrymple Bay and Port Dudgeon than Abbot Point.

He estimated it would take QR two years to build the new rail line which would just be in time to meet customer requirements for early liftings by mid-2014. QR is also planning to network smaller iron-ore operators in Western Australia's Pilbara region to give economies of scale in a larger cartage operation.

Even if QR failed to meet its tonnage forecast for the current financial year because of the floods in Queensland, Mr Hockridge told shareholders at the company's first annual general meeting that it expects to meet its prospectus forecast of EBIT of $578 million. QR's first forecast was that it could haul 233 million tonnes of coal in 2011, but pared the number from 200 million to 210 million tonnes.

Mr Hockridge disclosed that coal volumes in the last four months ending Oct 31 declined 16 per cent in Queensland compared to the same period in 2010.

Queensland used to ship the bulk of its coal to Japan and Korea, but QR Chairman John Prescott said because of urbanisation and industrialization of emerging Asian economies, he foresees a larger volume going to China and India.

RELATED STORIES