Australian coal miner Fortescue Metals requests 260 rail carriers

China CNR Corp, one of the nation's leading train manufacturers, signed an agreement with Australian miner Fortescue Metals Group Ltd (FMG) to deliver the world's largest railway freight cars to Australia, advancing the high-end market, according to the State-owned Assets Supervision and Administration Commission.

CNR will deliver 260 40-ton-axle-load mining cars to FMG, Australia's third-largest iron ore miner. The carriers are the largest railway freight cars in terms of loading capacity, the report said.

CNR has been exporting freight cars to Australia since 1999, the first Chinese train maker to export such vehicles to developed economies, and it has worked with global miners such as Rio Tinto and BHP Billiton.

In all, the company has already exported more than 5,000 freight cars to Australia.

China is operating a high-speed rail network with a total length of 7,531 kilometers, the world's longest. With a budget of 2 trillion yuan ($309 billion), and 16,000 kilometers of new tracks, the network will serve more than 90 percent of the population by 2020, according to the government.

Besides developing the domestic market, China has also stepped up efforts to take a bigger slice of the global market.

CNR is preparing to form a joint venture with Poland's PKP Cargo in Warsaw to manufacture trains for European markets, according to a CNR source who declined to be named.

The fifty-fifty joint venture company will be involved in premanufacturing work for Poland's train makers.

Earlier reports said CNR and CSR Corp Ltd, China's largest train makers, are in final negotiations for four deals worth $800 million with UK companies.

The contracts would be the first for Chinese train producers to tap the Western European market, the reports said.

CNR may bid with France's Alstom Group for high-speed rail contracts in the US, Brazil and Argentina under an agreement to boost cooperation, according to a Dec 8 report from Bloomberg.

CNR has already committed to two projects in Brazil and signed an agreement with Argentina to export vehicles, the source said.

Since 2003, China has signed agreements or Memoranda of Understanding for bilateral cooperation on railways with more than 30 countries, including the United States, Russia, Brazil, Saudi Arabia, Turkey, Poland and India.

Last week, when President Hu Jintao visited the US, CSR signed letters of intent for ventures with General Electric. The deals could bring in $1.4 billion and add 2,000 jobs in the United States, including an order for 500 exported locomotive kits and related services valued at $350 million, GE Transportation Chief Executive Officer Lorenzo Simonelli said in an interview with Bloomberg last week.

China Daily

(China Daily 01/25/2011 page14)