A partnership between Rio Tinto and Perth-based company Gemco Rail to build 100 rail cars in the Pilbara is a significant milestone for local manufacturing and the environment, says the Australasian Railway Association.
This partnership has been developed by Rio Tinto, Gemco Rail and Qiqihar Railway Rolling Stock (QRRS), and is supported by the Western Australian State Government.
Rio Tinto expects to invest approximately $150 million to purchase 100 locally built ore rail cars over six years, as well as continued investment in bearing refurbishment over 10 years, to support the company's Pilbara operations.
ARA's CEO Caroline Wilkie said the decision was a major step forward in supporting a sustainable local rail industry.
"This commitment sets a new standard in support for local manufacturing and local content and will lay the foundations for more partnerships to increase Australian capability in the future," Ms Wilkie said.
"One of the ARA's key missions is to increase the sustainability of the rail sector and this deal is also a perfect example of how we can reduce emissions by localising key manufacturing and maintenance in the rail supply chain."
Rio Tinto's Richard Cohen, who is an ARA Board member and the Chair of the Heavy Haul Executive Committee, said: "We are very proud to be leading the way in bringing iron ore car manufacturing and maintenance to the Pilbara and for the positive impacts this will bring to the region."
Mr Cohen said this initiative will bring a new industry to the Pilbara, creating jobs and providing more opportunities for local and Indigenous businesses.
The first 40 ore cars will be built at Gemco Rail's existing facility in Forrestfield, while the company establishes an additional facility in Karratha.
The new Karratha facility will reduce the need to transport iron ore cars and bearings between the Pilbara and Perth, removing an estimated 150 truck journeys from WA roads and 300 tonnes of CO2 each year.
Once this new facility is operational, Gemco Rail is expected to build an average of 10 ore cars per year, replacing ore cars as they are retired from Rio Tinto's existing fleet. The new Karratha facility will also support the supply of new and reconditioned ore car bearings from the Pilbara in an industry-first.
The WA Government will assist Gemco Rail with $6.9 million in funding under the Local Manufacturing Investment Fund (LMIF) to support the company's railcar manufacturing capabilities.
The WA Government said the LMIF funding will be used by Gemco to upgrade its Forrestfield facility and establish the new facility in Karratha.
The first locally built railcar is expected to be delivered in mid-2024, while the Karratha-based facility is expected to be established by the end of 2024.
