Aurizon – Unlocking CapacityClean Coal Day 2014

Simon SmartVice President Commercial Development

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Aurizon is Australia’s largest rail freight operator

• Top 50 ASX-listedcompany

• Market capitalisation more than AU $10 billion*

• More than 100 sites across Australia

• Employing approximately 7500 people in hundreds of communities across Australia

• We move more than 250 million tonnes of Australian commodities each year

* at August 2014

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Core business segments

• Hauling over 200mt of coal per year

• Servicing near to 50 mine sites in Queensland and New South Wales

• Hauling over 45mtpa of bulk minerals and commodities including Alumina, Bauxite, Nickel, across road and rail

• Supply chain solutions

• Strategically located maintenance depots across Australia

• First third party haulage provider to the iron ore industry in Western Australia

• Headquartered in Perth with six iron ore depots across Western Australia

• Hauling over 29mtpa of iron ore across 1,300km of track

• We operate and manage the 2,670 kilometre open access Central Queensland Coal Network (CQCN)

• Construction of brownfield and greenfield rail expansion projects

• Additional network services

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Metallurgical coal global seaborne demand (Mtpa)

21%

45%

2011

240

13%14%23%

51%

CAGR 3.1%

2025

370

27%

15%

14%

43%

2013

288

27%

13%20%

40%

2012

253

19%14%

Thermal coal global seaborne demand (Mtpa)

CAGR 3.9%

2013

952

24%13%14%

49%

2012

906

24%10%14%

52%

2011

807

21%10%

15%

54%

2025

1,385

10%

34%

17%

39%

ChinaIndiaJapanRest of the world

Asia will drive growth in demand for Australia’s coal and iron ore

Source: Wood Mackenzie Coal Market Service, July 2014; Wood Mackenzie Iron Ore Market Service, July 2014

Iron Oreglobal seaborne demand (Mtpa)

CAGR 2.9%

2013

1,278

65%

11%

24%

2012

1,187

64%

11%

25%

2011

1,127

61%

11%

27%

2025

1,689

7%

69%

24%

ChinaJapanRest of the world

ChinaIndiaJapanRest of the world

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Aurizon growth opportunities supporting growth in demand

Pilbara

Mid West

Yilgarn

Bowen Basin

GalileeBasin

Hunter Valley

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Japan is a strong long-term partner with Australia and Aurizon

We encourage continuing Japanese involvement and commitment to the growth of Australian coal

Thermal coal exports by destination FY14 – total 194Mt

Metallurgical coal exports by destination FY14 – total 180Mt

Source: Australian Bureau of Statistics (customised report)

6%

17%

1%

10%

24%

41%

OthersIndiaTaiwan

South KoreaChinaJapan

24%

11%

11%

5% 27%

24% • Japanese companies have interests in 49 Australian coal mines – these mines account for 77% of Australian production.

• Across the economy Japan is Australia’s third largest investor (following US and UK), with $131 billion invested as at the end of 2013.

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Managed within regulated rail and port infrastructure

CQCN is one of the world’s largest integrated bulk supply chains

Central Queensland Coal Network

Cope with periodic extreme weather events

Substantial electrification

Services over 50 coal mines across 2,670 km of common user track

Transports coal to five independently operated export terminals

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100

0

200

150

250

50

FY10FY09 FY11FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY14FY12 FY13

39%

Network optimisation has supported record volumes in FY2014In FY14, over 50 operating coal mines in the Bowen Basin were linked to the CQCN. These mines transport both metallurgical and thermal coal via the network, on which coal volumes have increased by 39% since FY02.

FY14 was the best financial year on record for the CQCN delivering 13% more tonnes with only 2% more trains.

CQCN historical coal volumes (FY02 – FY14, mtpa)2

1. Wood Mackenzie, November 20122. Aurizon Network Financial Year Operational Data Reports

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Volume breakdown (2013, mtpa)1

MouraGAPE GoonyellaBlackwaterNewlands

73%

39%

74%

27%

89%

61%

26%

11%

Blackwater MouraGoonyella

100%

Newlands

Metalurgical Coal Thermal Coal

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Transformation projects will unlock capacity in the network

Additional Capacity Generated by Transf. Projects*

*diagram is indicative only

Our transformation program seeks to unlock capacity within the existing network.

A key theme is using technology as an enabler for:

Better planning & scheduling

Optimised day of operations management

Readily accessible quality asset data

High production mechanised maintenance fleet

Improved tools and processes in the field

Current Growth Projects

Mech. Fleet Upgrade

Strategic Planning Tool

Track Recording Car

Scheduling Optimiser

Cum

ulat

ive

Inve

stm

ent $

m

Network capacity

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A flow based strategic planning tool will assess impacts on network capacity

A flow-based model allowing optimisation of the balance between throughput, reliability and cost.

Achieve Network Demand

Achieve Asset Performance & Sustainability

Alignment of Resource /Plant Requirements

Balance

PACE – Possession and Capacity Evaluation

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Optimising planning and scheduling will result in increased velocity and asset utilisation

Network Forecasts and

PlanningTimetable generator

Real-Time Planning Support

Conflict Resolution & Optimization

Day of Operations (DOO)

Supply Chain Optimisation

Real-Time Traffic Management

Partnering with GE and incorporating learnings from Norfolk Southern to deliver a single solution to optimise planning, scheduling & day of operations for the CQCN in FY15.

Better utilise capacity of existing assets by enabling more trains, maintenance and track activity

Reduce Day of Operation losses through informed decision making

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Enhanced data capture will enable a shift from reactive to predictive maintenance

Whole of life asset management with tools to improve the velocity, access & accuracy of asset information

Track Defect Inspection ReportingSAP Integrated Asset Management System

Mobile tablets for real time fault reporting in the field

Geographic information (GIS) overlay

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Proof of Concept

Upgrades to the Mechanised Maintenance fleet will increase productivity and network reliabilityA major fleet replacement program is underway which will see the entire Resurfacing fleet upgraded with high production machines designed with leading edge technology and capability.

Higher production will be achieved with less time on track.

Control system operated with quick access touch screen monitors

Status

0.93 0.94

1.15

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Turnouts (per Hour)

Old

New - Commissioning

New - Projected

329378

540

0

100

200

300

400

500

600

Mainline Tamping -Metres (per Hour)

Old

New - Commissioning

New - Projected

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Proactively addressing coal dust across the CQCN…

A biodegradable polymer is sprayed onto the surface of the loaded coal

Significant decrease in opacity readings post-veneering

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… with multiple approaches used to manage fouled ballast

High Production Ballast Cleaner

New High Production ballast cleaning machine to be commissioned in FY2017

GPR has mapped ballast fouling on entire mainline Network to enable the ballast cleaning program to prioritise highly fouled sections of track

Ground Penetrating Radar

Category Description PVC range (%)

5 Clean 0 to <10

4Moderately 

Clean 10 to <20

3Moderately Fouled 20 to <30

2 Fouled 30 to <50

1Severely fouled >=50

End of life assets replaced by predictive, remotely monitored alternatives

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New Electric Rail LubricatorEnd of life Mechanical Rail Lubricator

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Commercial In Confidence

Less intrusive inspection techniques improve quality of asset data

Unmanned Aerial Vehicles (UAV) / Drones

High definition images

Infra-red analysis

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We are also using technology to improve resilience to extreme weather…

Temporary repair in flood conditions Renewed larger culvert in flood conditions

Hydrology mapping is used to guide culvert design and size End of life culvert replacements an opportunity to increase axle loads and improve flood

resilience

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… and innovative solutions to expand the network

Construction of Bauhinia Expansion

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Thank You