Aurizon’s Holdings Limited
(ASX:AZJ) largest shareholder has sent a word of warning to the company about building a rail line in the Pilbara, saying return on investment isn’t guaranteed, given dropping commodity prices.
According to media reports, United Kingdom hedge fund The Children’s Investment Fund Management – which holds an 11 per cent stake in Aurizon – says there’s no certainty of a payoff from the infrastructure in the long term.
It says that’s especially the case as junior miners in the area risk going under if iron ore prices continue to weaken.
Aurizon chief executive officer Lance Hockridge told media the construction of a stand-alone, open access railway in the Pilbara was the main option under consideration by the group as it looks to increase its exposure to iron ore.
Aurizon generated a net profit of $175.7 million in the first half of fiscal 2013.
