Genesee & Wyoming Australia Pty Ltd. (GWA) has expanded two existing rail haulage contracts with Arrium Ltd. (formerly OneSteel) to transport an additional 2.7 million metric tons per year (mt/y) of export iron ore in South Australia. To support the increased shipments under the two contracts, GWA will invest A$60 million to purchase new narrow gauge locomotives and wagons, as well as to construct a standard gauge rolling-stock maintenance facility.

GWA currently transports approximately 6 million mt/y of iron ore over narrow gauge rail lines owned by Arrium from mines in the Middleback Ranges to Whyalla, South Australia. The amended narrow gauge contract provides for the necessary rail equipment to increase this tonnage by more than 2 million my/y in the first half of 2013.

In addition, GWA amended a previously announced standard gauge contract to haul 3.3 million mt of export iron ore from Arrium’s Peculiar Knob mine, which is located near GWA’s Tarcoola to Darwin rail line. GWA has already invested A$67 million for new locomotives and facilities to support shipments from the new mine, which are expected to commence in the fourth quarter of 2012. The amended standard gauge contract increases the Peculiar Knob tonnage by more than 500,000 mt/y and also includes rights for GWA to serve other potential iron ore tenements in South Australia, including Hawk’s Nest.

“We are pleased to be expanding our service relationship with Arrium in South Australia and to be supporting our customer’s growth to an annual run rate of 11 million mt of export iron ore by mid-2013,” said GWI President and CEO Jack Hellmann. “We are committed to providing world class rail service and look forward to supporting Arrium’s expansion to even higher tonnages going forward.”

Genesee & Wyoming owns and operates short line and regional freight railroads and provides railcar switching services in the United States, Australia, Canada, the Netherlands and Belgium. It operates the Tarcoola to Darwin rail line, which links the Port of Darwin to the Australian interstate rail network in South Australia. Operations currently include 65 railroads organized in 10 regions, with more than 7,600 miles of owned and leased track and approximately 1,400 additional miles under track access arrangements.