Iron ore deal

Genesee and Wyoming Australia has signed a rail haulage agreement with a subsidiary of WPG Resources to transport 3.3 tonnes a year of iron ore from WPG’s Peculiar Knob mine to Port Pirie.

The haulage service from a rail siding at Wirrida, on the Tarcoola to Darwin rail line, is expected to start in 2012.

The deal means Genesee and Wyoming Australia plans to buy nine new 4400 horsepower locomotives and other rolling stock worth $67 million.

When the mine is operating at full capacity, Genesee and Wyoming Australia expects the contract to generate annual revenues of about $A50 million.

The contract is contingent on WPG getting approvals from the South Australian Government for the mine and port infrastructure.