The Australian Competition and Consumer Commission gave approval to the system, which is designed to provide Hunter Valley coal producers with a proportionate share of the available capacity of the coal chain.

ACCC chairman Graeme Samuel said the CBS is expected to result in demurrage savings upwards of $A175 million for the industry for the remainder of 2007.

Despite expansion at the port to a capacity of 102 million tonnes per annum, and ongoing expansion in the Hunter Valley, there is still an imbalance between the amount of coal that producers want to export and the capacity of the infrastructure, which moves coal from the mines onto vessels at the port.

While there has been some criticism that the CBS reduces production at mines and removes the pressure for the industry to invest in expanding the capacity of the coal chain, Samuel said this view was incorrect.

“Any limits on production levels at individual mines are a factor of the limited capacity of the coal chain, and not the reinstatement of the capacity balancing system itself," he said.

“If there was no system in place, the coal chain would not be able to export more coal and producers would need to reduce production as vessels wait even longer in the queue to load coal and to avoid excess stockpiling at mines."

He added that the ACCC was "satisfied" that reinstating the amended system would not constrain export growth.

“The ACCC notes significant commercial incentives exist for all industry participants to maximise coal exports," Samuel said.

“Coupled with recently completed and ongoing expansion projects in the Hunter Valley, particularly at the port, reinstating the modified capacity balancing system for the remainder of 2007 is unlikely to defer necessary investment."

The ACCC has granted authorisation, as requested, until December 31, 2007.