{"id":185842,"date":"2025-03-13T15:32:38","date_gmt":"2025-03-13T05:32:38","guid":{"rendered":"https:\/\/www.vibewire.com.au\/?p=185842"},"modified":"2025-03-13T15:32:38","modified_gmt":"2025-03-13T05:32:38","slug":"centrex-phosphate-mine-enters-voluntary-administration-citing-rail-costs","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=185842","title":{"rendered":"Centrex phosphate mine enters voluntary administration citing rail costs"},"content":{"rendered":"\n

Phosphate was supposed to be the outback’s next big economic opportunity, but one mining company says the cost of rail freight has brought its project to the end of the line. <\/p>\n\n\n\n

Just three years after its first shipments<\/a> were celebrated for reducing Australia’s reliance on imports, the Ardmore Mine, about 140 kilometres south of Mount Isa, has entered voluntary administration, with about 150 jobs now on the line.<\/p>\n\n\n

\n
\"\"
Mining companies say the cost of hauling their minerals to port is too high. (Supplied: North West Phosphate)<\/figcaption><\/figure>\n<\/div>\n\n\n

The critical mineral is a key ingredient in fertiliser and some rechargeable batteries, and the Cambrian Georgina Basin, on the Queensland-Northern Territory border, contains some of the largest untapped deposits in the world.   <\/p>\n\n\n\n

But as the Centrex owned-and-operated site joins a growing list of the region’s minerals<\/a> projects in financial strife, a common issue has emerged. <\/p>\n\n\n\n

The cost of accessing the rail network, operated by government-owned Queensland Rail (QR), is being blamed for stopping prosperity in its tracks. <\/p>\n\n\n

\n
\"\"
Australia has some of the world’s largest deposits of phosphate. (Supplied: Geoscience Australia)<\/figcaption><\/figure>\n<\/div>\n\n\n

Untapped potential<\/strong><\/h2>\n\n\n\n

As the international shortage of fertiliser supply hit farmers hard in 2022, mining companies described the Georgina basin as a “honey pot waiting to be tapped”<\/a>. <\/p>\n\n\n\n

They claimed domestic phosphate production had the potential to bring food security to Australia, and open the outback to new industries such as cropping<\/a> and renewable energy components. <\/p>\n\n\n

\n
\"\"
Granulated and pulverised phosphate is used in fertilisers. (Supplied: Fertoz)<\/figcaption><\/figure>\n<\/div>\n\n\n

By September 2024, Centrex sent its first shipment of high-grade phosphate<\/a> to India, via the Townsville Port.<\/p>\n\n\n\n

“The Georgina Basin \u2026 it’s a huge area; it’s got some really good phosphate deposits,” Centrex\u2019s managing director Robert Mencel said at the time. <\/p>\n\n\n

\n
\"\"
About 90 per cent of Australia\u2019s phosphate deposits sit in the Georgina Basin. (Supplied: Geoscience Australia)<\/figcaption><\/figure>\n<\/div>\n\n\n

But now Centrex is citing freight costs along the Mount Isa to Townsville line as the main factor in its financial woes. <\/p>\n\n\n\n

Cloncurry Shire Mayor Greg Campbell said most of the 150 workers who could lose their jobs were local residents. <\/p>\n\n\n

\n
\"\"
Mayor Greg Campbell says the announcement will hurt the region. (ABC North West Qld: Meghan Dansie)<\/figcaption><\/figure>\n<\/div>\n\n\n

“There’s 150 plus years of mining working well in our shire \u2026 so it’s very disappointing,” Cr Campbell said. <\/p>\n\n\n\n

“[It also takes] the shine off how much positivity is still in our shire and in the region.”<\/p>\n\n\n\n

Off the rails<\/strong><\/h2>\n\n\n\n

The Centrex project used Australia’s largest rail freight operator, Aurizon, to transport its phosphate 950km east to the Townsville Port.<\/p>\n\n\n\n

Aurizon accesses the Queensland Rail-owned network through an undertaking given to the Queensland Competition Authority, which regulates the prices for monopoly infrastructure in the state.  <\/p>\n\n\n\n

The authority is investigating the 2025 undertaking, which from June will set out the terms and conditions for third parties to access more than 6,500km of track. <\/p>\n\n\n

\n
\"\"
Phosphate mining was originally touted as a boon for outback Queensland. (Supplied: North West Phosphate)<\/figcaption><\/figure>\n<\/div>\n\n\n

A spokesperson for Aurizon, which has faced criticism over the cost of access<\/a> to its own network, said the company shared Centrex\u2019s concerns. <\/p>\n\n\n\n

“Aurizon has previously made a joint submission with Centrex and other companies indicating our concern with the high cost of using the Mount Isa to Townsville rail track,” the spokesperson said. <\/p>\n\n\n\n

In that submission, Aurizon said its internal benchmarking showed the rail corridor was the most expensive of its type in the country, charging two to three times other similar tracks. <\/p>\n\n\n\n

“[They] need to provide a substantial reduction in rail access charges that will incentivise more bulk freight to be carried on rail along this corridor rather than on publicly funded roads,” the spokesperson said. <\/p>\n\n\n

\n
\"\"
Mount Isa’s Glencore copper mine is set to cease operations in 2025. (ABC North West Queensland: Kelly Butterworth)<\/figcaption><\/figure>\n<\/div>\n\n\n

Mining giant Glencore also made a submission, which said the cost of the Mount Isa line contributed to the decision to close its copper mining operations in the region.<\/p>\n\n\n\n

“The closure decision of the copper mines was made on the grounds of economic viability,” the submission said. <\/p>\n\n\n\n

“The economic viability of copper mining was definitely affected by the high cost of the rail access and transportation.<\/p>\n\n\n\n

“Glencore has made submissions of concern across all of Queensland Rail’s access undertakings since the separation of the Aurizon Network and Queensland Rail undertakings.”<\/p>\n\n\n\n

Canary in the phosphate mine<\/strong> <\/h2>\n\n\n\n

Queensland Rail’s head of regional Scott Cornish said revenue received from the access charges was used to cover the capital and operational costs of running the railway. <\/p>\n\n\n\n

“Network access service is one component in a complex logistics supply chain,” he said. <\/p>\n\n\n\n

“[It] also includes above rail operations, road pick-up and delivery services, intermodal terminal services and ship loading at the Port of Townsville.” <\/p>\n\n\n\n

Robbie Katter, the state member for Traeger and leader of the Katter Australia Party, said the collapse of Centrex highlighted a systemic issue. <\/p>\n\n\n

\n
\"\"
Robbie Katter says freight costs under Queensland Rail are crippling the mining region. (ABC News: Emily Dobson)<\/figcaption><\/figure>\n<\/div>\n\n\n

“It’s not the biggest mine in the region \u2026 but at the same time, it’s that canary in the coal mine,” Mr Katter said. <\/p>\n\n\n\n

He said freight that should be on rail was being pushed onto the Flinders Highway, which in turn required more maintenance. <\/p>\n\n\n\n

\n

“Taxpayers aren’t going to miss the measly bit of profit they get off the rail line,”<\/p>\n<\/blockquote>\n\n\n\n

Mr Katter said.<\/p>\n\n\n\n

“But they’re definitely going to miss all the economic benefit they get off Centrex and other mines closing, or other ones not opening, because this rail line is not performing.”<\/p>\n\n\n\n

At a different site 200km north of Mount Isa, North West Phosphate operates a mine at one of Australia\u2019s largest phosphate deposits<\/a>.<\/p>\n\n\n\n

Managing director John Cotter is still optimistic about the mineral’s future in North West Queensland, but he said something had to give.<\/p>\n\n\n

\n
\"\"
Mr Cotter says rail freight costs are pushing mines into voluntary administration. (ABC North West Qld: Emily Dobson)<\/figcaption><\/figure>\n<\/div>\n\n\n

“We’ve chosen the logistics path that was different to Centrex to get around [rail transport costs], but it still doesn’t remove the base problem,” he said. <\/p>\n\n\n\n

\n

“We have the most expensive rail line and power system in the country, in the heart of the area that’s meant to be developing the wealth of their nation.”<\/p>\n<\/blockquote>\n\n\n\n

ABC News<\/p>\n","protected":false},"excerpt":{"rendered":"

Phosphate was supposed to be the outback’s next big economic opportunity, but one mining company says the cost of rail freight has brought its project to the end of the line.\u00a0<\/p>\n","protected":false},"author":21,"featured_media":185843,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[15419,273,167,47,1],"tags":[15852,15851,7465],"class_list":["post-185842","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aurizon","category-australia","category-queensland-rail","category-rail-news","category-uncategorized","tag-centrex","tag-mount-isa","tag-queensland"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t