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Queensland’s government opened the initial share sale of its coal freight network, an offer that may be worth about A$7 billion ($6.5 billion) and become Australia’s largest since Telstra Corp. in 2006.

“QR National is a growth story - it is Australia’s largest rail freight company and the world’s largest rail transporter of coal from mine to port for export markets,” Treasurer Andrew Fraser said in Brisbane yesterday at a pre-registration for retail investors.

Queensland, the third-most-populous Australian state, is selling assets to prop up finances after the recession crimped government revenue. State Premier Anna Bligh said in December she’ll put other assets up for sale in the next two years, including a road network, a coal terminal and a port.

The sale of the non-passenger assets may fetch A$7 billion, Bligh said in June last year. Australia’s government in 2006 sold A$15.5 billion of shares in Telstra, the nation’s largest telephone company.

The government formed QR National in July when state-run rail provider QR Ltd., with assets worth A$12 billion, split its passenger train and freight operations ahead of the planned listing for the fourth quarter.

“The climate for IPOs hasn’t been too good recently,” Peter Chilton, fund manager at Constellation Capital Management Ltd. said by phone from Sydney yesterday. The network “will require a lot of investment for maybe quite a low return on capital. That is an issue.”

Markets Tumble

Aston Resources Ltd., an Australian coal developer, had to cut the price of its IPO last month as markets tumbled. The cut in Aston’s offer price follows a 5.9 percent drop this year in Australia’s benchmark S&P/ASX 200 index of stocks.

Bilfinger Berger AG, Germany’s second-largest building company, pulled the IPO of Australian unit Valemus Ltd. after investors balked at the price.

The state government, which is spending A$15 million on the IPO marketing campaign, will initially retain 25 percent to 40 percent of the...