On Friday, October 22, Aurizon announced that it would buy One Rail Australia for US$1.75 billion as it looks to diversify from coal and add bulk capacity, though the outlay and worries about the impact on earnings sent shares 7% lower, reported Reuters.
Aurizon, Australia’s largest rail freight operator, stated the deal would give it greater exposure to commodities, supporting its transition to greener energy.
More than a third of Aurizon’s core earnings came from coal in fiscal 2021 and it transports more than 200 million tonnes of metallurgical and thermal coal a year, according to its website.
“The One Rail acquisition delivers a step change for Aurizon Bulk as a new entrant in the South Australia and Northern Territory region, and supports the ongoing growth of non-coal revenue in the Aurizon portfolio,” CEO Andrew Harding said.
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