Sunday, Oct 11, 2015 at 15:27
Rail can't compete with roadtrains because of its humungous cost and inflexibility. This argument has raged since the 1920's when trucks started to compete with rail.
In todays world, roadtrains along with excellent roads, win hands-down, until the amount shifted is in the millions of tonnes a year.
With big road-building equipment, you can knock out a sizeable length
mine haul road in weeks at a cost of a couple of million dollars - railways take years to install and cost in the hundreds of millions and even billions.
Locos run to $5,000,000 a piece, rail ore trucks are $150,000 each, a rail line runs to 5 or 10 million a km. Just the earthworks alone on the new 330km
Roy Hill rail line ran into $630M. Then the cost of the line, signalling, etc, triples or quadruples that again.
Many mines only have smallish ore bodies that just can't justify the cost of a rail line. In mining circles, they often specialise in finding smaller ore bodies within trucking distance of a large ore body (known as "satellite" ore bodies) and these are then trucked into a central treatment plant.
In the case of iron ore, there are numbers of smaller iron ore producers who only have small ore bodies, where it's cost effective to roadtrain the iron ore to the nearest port.
If the ore body runs out, becomes uneconomic due to lowering commodity prices, or some other factor - then the miner can just get rid of the trucks, and they don't have the burden of a now-useless rail line to carry.
The trucks can move off to some other project - and that project can cover a wide range of hauling options.
Cheers, Ron.
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