The business was created in 2010 when Glencore's predecessor, Xstrata, purchased its own locomotive and wagon fleets to serve its coalmines in the Hunter Valley following dissatisfaction with the performance of the incumbent rail freight operators in the region.
Glencore currently has 30 GE C44aci locomotives and approximately 900 wagons in its fleet, with crewing and management of day-to-day operations sub-contacted to Genesee & Wyoming subsidiary Freightliner Australia.
The report suggests that Glencore will guarantee a minimum annual haul of 40 million tonnes of coal, although its current exports from the Hunter Valley through the Port of Newcastle are thought to be in the region of 51 million tonnes.
With many synergies with their own Hunter Valley businesses, Australian rail freight operators Aurizon and Pacific National would be likely front runners to pick up the assets, although analysts suggest Glencore's asking price may be on the high side.
However, it has also been reported that the group of pension funds which are expected to assume ownership of Pacific National later this year, following the recent agreement to purchase parent company Asciano, have already indicated their interest in the sale.
Due diligence by interested parties is likely to commence within the next few weeks with a sale expected to be completed by September this year.
