Genesee & Wyoming Announces Expansion of Australian Iron Ore Haulage Contracts

Genesee & Wyoming Inc. (GWI) GWR announced today that its subsidiary, Genesee & Wyoming Australia Pty Ltd (GWA), has expanded two existing rail haulage contracts with Arrium Limited (formerly OneSteel) ARI to transport an additional 2.7 million tons per year of export iron ore in South Australia. To support the increased shipments under the two contracts, GWA will invest A$60 million to purchase new narrow gauge locomotives and wagons as well as to construct a standard gauge rolling-stock maintenance facility. GWA currently transports approximately six million tons of iron ore per year over narrow gauge rail lines owned by Arrium from mines in the Middleback Ranges to Whyalla, South Australia. The amended narrow gauge contract announced today provides for the necessary rail equipment to increase this tonnage by more than two million tons per year in the first half of 2013. In addition, GWA amended a previously announced standard gauge contract to haul 3.3 million tons of export iron ore from Arrium's Peculiar Knob mine, which is located near GWA's Tarcoola to Darwin rail line. GWA has already invested A$67 million for new locomotives and facilities to support shipments from the new mine, which are expected to commence in the fourth quarter of 2012. The amended standard gauge contract announced today increases the Peculiar Knob tonnage by more than 500,000 tons per year and also includes rights for GWA to serve other potential iron ore tenements in South Australia, including Hawk's Nest.