New plan on track for disused SA rail line
A South Australian company will prepare a business case for reopening the decommissioned 250km rail line between Leigh Creek and Port Augusta, with the company hoping to transport one million tonnes of fertiliser a year.
A three-engine coal train running along the Leigh Creek to Port Augusta rail line before it was decommissioned in 2016. Photo: Flinders Power
NeuRizer, formerly Leigh Creek Energy, announced this morning that the state government has granted it exclusive rights to present a business case for reactivating the 250km government-owned rail freight corridor, which was decommissioned in 2016.
The train line used to transport an average of three million tonnes of coal each year from the Leigh Creek coalfields in SA’s far north down to the Port Augusta Power Station.
Alinta Energy’s decision to close both the power station and the coal mine saw the track decommissioned in 2016 after nearly 60 years in operation.
NeuRizer is hoping to revive the Leigh Creek township by transforming the coal fields into the largest underground coal gasification site in Australia and a globally significant producer of nitrogen-based urea fertiliser for agriculture.
Their flagship $2.6 billion Leigh Creek project, set for a final investment decision next year, will use unconventional technology – banned in Queensland and Scotland – to extract syngas from beneath the ground and convert it into urea for agricultural and industrial use.
NeuRizer says its domestic urea distribution will be conducted “entirely by rail”, and touted Port Augusta as a central railway hub with connections to the eastern states and Western Australia.
NeuRizer’s map of the Leigh Creek to Port Augusta train route with estimated levels of urea demand.
“The railway will be used to move the 1 million tonnes of urea that will be produced by the NeuRizer Urea Project to Port Augusta for further distribution in Australia,” the company told the ASX yesterday.
NeuRizer said it presented an unsolicited proposal to the Department of Treasury and Finance to acquire or lease the 250km rail asset from the Department of Infrastructure and Transport on similar terms to when the Leigh Creek coalfields were operational.
Prior to the line’s closure, the state government leased the rail asset to Flinders Power, operators of the Leigh Creek mine, before taking back control in 2017.
https://www.youtube.com/watch?v=AAwJ_ZTdJE0&t=86s
The state government has given NeuRizer exclusive rights for six months to prepare a business case on the benefits of reactivating the line.
“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.”
Leigh Creek is a former coal mining town about 550 km north of Adelaide. In its boom years in the 1980s, it used to be home to more than 2500 people, but now has a population of less than 150.
The Leigh Creek Urea Project aims to create 1200 jobs with about 1000 of those on site.
