Centrex locks in Aurizon to provide long-term logistics solutions to Ardmore phosphate rock mine
By 2024, Centrex plans to be producing 625,000tpa of phosphate rock from its Ardmore mine in Queensland.
Under a deal inked this week, Centrex (ASX: CXM) has secured Australia’s largest rail freight operator Aurizon (ASX: AZJ) to provide long-term transport, storage and stevedoring services to its phosphate rock project in Queensland.
Centrex’s wholly-owned subsidiary Agriflex secured the agreement, which will see Aurizon provide all the logistics services for offtake from the Ardmore phosphate rock mine.
Aurizon will be the sole, and predominantly, exclusive supplier for containerised logistic solutions from the mine site to Townsville port.
Logistics services include containers, container loading at the Ardmore site, trucking via triple road trains to Mount Isa, followed by rail transport to Townsville.
Aurizon will then provide storage containers at Townsville and stevedoring services to convey and load the rock phosphate to bulk vessel.
De-risking Ardmore
Today’s announced deal replaces a short-term agreement executed in May last year between the parties to begin mining and transport of phosphate rock from Ardmore.
Under this latest arrangement, the guaranteed capacity for Ardmore phosphate rock transport increases from 216,000 tonnes per annum to 508,800tpa.
Additionally, the contract provides for further targets beyond these volumes. Centrex must also offer Aurizon all phosphate concentrate generated from Ardmore up to installed capacity except for 10,000tpa, which has been allocated for Australia’s domestic market.
Centrex managing director Robert Mencel said the binding agreement with Aurizon “significantly de-risks” the Ardmore operation by providing a “long-term logistics pathway” for a “significant” production increase for a period of four years.
Mr Mencel added the Aurizon agreement also gives Centrex certainty in exporting its products to key customers.
“We are equally pleased to have the assistance of an organisation of the calibre of Aurizon, which is considered to be one of Australia’s preeminent logistic companies.”
Ardmore rock phosphate mine
Centrex began shipping beneficiated phosphate rock from Ardmore through the Townsville port in October last year.
The first parcel was shipped to an Australian customer via Singapore and comprised 500t grading 34.6% phosphorus pentoxide.
In late November, Centrex’s first international shipment from Ardmore occurred with 5,000t sold to leading New Zealand agricultural co-operative Ravensdown.
All-up, during the December quarter 53,814t of ore was mined from Ardmore, with 38,899t processed to generate 26,872t of beneficiated phosphate.
Through the quarter, 19,517t of beneficiated phosphate was shipped via the Townsville port, with customer feedback “positive”.
Centrex expects long-term offtake agreements will be finalised early this year.
By 2024, Centrex plans to be producing 625,000tpa of rock phosphate from Ardmore.