Australian mining giant Rio Tinto is partnering with Gemco Rail in an approximately $150 million deal to purchase 100 locally manufactured iron ore rail cars in the Pilbara over the next six years – a move described by the Australasian Railway Association as a “significant milestone” for local manufacturing and the environment.
In particular, Rio Tinto, Gemco Rail, and Qiqihar Railway Rolling Stock (QRRS) formed this collaboration, which is funded by the Western Australian State Government.
As part of the deal, Rio Tinto said it expects continued investment in bearing refurbishment over 10 years, to support the company’s Pilbara operations, the association said in a news release.
The decision, according to ARA CEO Caroline Wilkie, was a significant step in favour of a locally sustainable rail business.
“This commitment sets a new standard in support for local manufacturing and local content and will lay the foundations for more partnerships to increase Australian capability in the future,” Wilkie said.
She added, “One of the ARA’s key missions is to increase the sustainability of the rail sector and this deal is also a perfect example of how we can reduce emissions by localising key manufacturing and maintenance in the rail supply chain.”
Richard Cohen, the chair of the Heavy Haul Executive Committee at Rio Tinto and a member of the ARA Board, expressed his delight to be paving the path for iron ore car manufacturing and maintenance in the Pilbara, as well as the positive effects this will have on the region.
This plan, according to Cohen, will introduce a new industry to the Pilbara, creating employment and expanding prospects for local and Indigenous enterprises.
Under the partnership, the first 40 ore cars will be manufactured at Gemco Rail’s current Forrestfield factory, while another will be built in Karratha.
The new Karratha plant will eliminate the need to transport iron ore cars and bearings between the Pilbara and Perth, saving around 150 truck journeys and 300 tonnes of carbon dioxide each year.
As ore cars are withdrawn from Rio Tinto’s current fleet, Gemco Rail anticipates replacing them with an average of 10 new ore cars per year until this new facility is up and running.
In a first for the industry, the new Karratha plant will facilitate the delivery of brand-new and refurbished ore vehicle bearings from the Pilbara.
In order to boost Gemco Rail’s ability to produce railcars, the WA Government will provide $6.9 million in funding through the Local Manufacturing Investment Fund (LMIF).
The WA Government stated that Gemco will utilise the LMIF cash to modernise its Forrestfield plant and create the new facility in Karratha.
The Karratha-based factory is anticipated to be operational by the end of 2024, with the delivery of the first locally constructed railcar scheduled for the middle of the year.
