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Aurizon AGM dominated by Adani concerns

17 October 2019

17 October 2019

Aurizon’s annual general meeting (AGM), held in Brisbane today, was dominated by concerns over Aurizon’s potential involvement in the destructive Adani Carmichael coal project.

Both shareholders inside the meeting and #StopAdani activists outside called on the rail freight company to refuse to provide coal haulage services to Adani, or invest any shareholder capital in rail upgrades necessary for the Adani project.

Disappointingly, Aurizon refused to take a position on the Galilee Basin proposals, saying it would not comment on “hypotheticals”.

Adani plans to transport the coal from its proposed Carmichael coal mine in the Galilee Basin to Abbot Point coal port by rail. To do this it will need to build an approximately 200km line that would connect with the existing Queensland rail network owned by Aurizon. 

While Aurizon must, by law, negotiate in good faith to allow access to its rail network, it is not required to do anything else, including paying for upgrades or transporting the coal. Today, investors and #StopAdani volunteers ensured that Aurizon understood that there is no support for it helping out Adani.

Major investor would consider divestment if Aurizon helps Adani

One of Aurizon’s biggest shareholders, Perpetual, got the ball rolling this morning, with news emerging that it would be prepared to divest from Aurizon should the company get involved with the Adani Carmichael project, which it sees as a material reputational risk.

Aurizon has seen this before, with at least two other major shareholders, the Children’s Fund and UniSuper, recently selling off massive stakes in the company, possibly over its links to Adani and the coal industry more generally. UniSuper, previously Aurizon’s biggest shareholder, sold off the majority of its holdings just after telling members it had requested Aurizon do no more than “meet the minimum legal requirements” in its dealings with Adani.

At its AGM this morning in Sydney, Perpetual confirmed media reports that it was taking a “hard line” on Aurizon and its relationship with Adani.

Crowds greet Aurizon shareholders

Back in Brisbane, a crowd of hundreds of #StopAdani protesters greeted shareholders as they arrived at the AGM. They were calling on Aurizon to make a commitment, as competitor Genesee and Wyoming has done, that it would not sign a contract to transport Adani’s coal.

Protest outside Aurizon’s AGM on 17 October 2019

AGM dominated by questions on Adani and climate

Inside the AGM, the chairman had to handle a constant stream of questions on Aurizon’s potential involvement in Adani Carmichael and the thermal coal industry more broadly.

Regarding Adani Carmichael, shareholders raised concerns about the reputational risk to Aurizon, the cost of paying for rail upgrades and the impact of Queensland thermal coal mining expansions on Aurizon’s NSW customers and business.

Aurizon would not be drawn on whether it would have a role in the Adani Carmichael project, saying there was no tender yet out for the transportation of the coal and the only thing it would commit to are its legal requirements.

The Chairman did admit that getting involved in the Galilee Basin would hinder Aurizon’s plans to diversify its business away from coal, which is currently linked to 80% of Aurizon’s revenues.

What the Galilee Basin coal projects would also do, according to a report by Wood Mackenzie, is harm Aurizon’s existing customers in the Hunter and Bowen basins by lowering the coal price and forcing down coal volumes from these existing coal producing areas. When asked about this, Aurizon’s Chairman Tim Poole dodged the question, referring only to the potential coal production of the first stage of the Adani Carmichael mine and ignoring the full picture of Galilee Basin development proposals.

“What we don’t plan for though, are for some of the events we’ve had…”

On climate more broadly, Aurizon paid lip service to the need to phase out coal use and limit warming to below two degrees, but it pointed the finger at government inaction, saying a “blueprint” for a transition was needed for Australia and the world. In the meantime, it clearly intends to continue business as usual fueling global warming on a massive scale.

Ironically, Aurizon admitted that extreme weather, fueled by the climate crisis, is happening more often and impacting its business. This includes an incident where, for the first time in the company’s history, all parts of Aurizon’s Central Queensland network were down due to cyclone damage. Aurizon revealed that although it does plan for some extreme weather, it recently has been taken by surprise by the increasing frequency and severity.

Disappointingly, Aurizon missed an opportunity at its AGM to reassure investors and the general public that it would stay away from the disastrous Galilee Basin developments. It remains one of two potential haulers of Adani’s coal, and therefore it will remain a key target of the #StopAdani campaign.

Take Action: Tell Aurizon it needs to refuse to haul Adani’s coal