Some of the biggest mining companies are running mines at a loss as the fixed costs of rail contracts mean it would be more costly to close them. One high profile case is Anglo American, says the SMH, Anglo is known to have take-or-pay contracts in place with Aurizon for rail access, and Anglo chief executive Mark Cutifani referred to the problems it was causing during the company's annual results in February. Unfortunately for Anglo, some of those contracts were struck during the absolute peak of coal prices around February 2011, when Queensland coking coal was fetching more than $US300 a tonne. The bulk commodity was circling $US110 a tonne this week, having folded under the dramatic rise in exports from producers in North America and Queensland. Glencore Xstrata, BHP Billiton, Peabody Energy and Rio Tinto also have rail contracts with Aurizon for their Queensland mines. Read more: (VIEW LINK)
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