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Newcastle plan is well received

PORT Waratah Coal Services has shed more light on the new industry-agreed plan to manage coal exp...

Blair Price
Newcastle plan is well received

An application on behalf of 14 Hunter Valley producers, PWCS and other port operator Newcastle Coal Infrastructure Group, as well as the New South Wales state government, was submitted to the Australian Competition & Consumer Commission on Monday.

PWCS is expecting the ACCC to make a decision on the application by the end of July.

The port operator is satisfied the agreement gives it the ability to enter into long-term contracts with producers, saying the plan provided a foundation for long-term operation and investment certainty.

“From PWCS’s perspective, an issue with growing coal exports from the Hunter Valley has been the Kooragang Island ‘common-user’ provision – a historic New South Wales government clause written into PWCS’s lease to ensure that PWCS accepts any vessel at any time,” the port operator said.

“This created uncertainty in terms of long-term terminal and coal chain investment and planning.

“Under the new agreement, the common-user clause is suspended, enabling PWCS to lock into 10-year contracts with customers.”

Under the new plan, PWCS will have the opportunity to build a new coal-loading terminal on Kooragang Island, with the potential fourth terminal to be imaginatively known as T4.

PWCS said it was currently sorting out contractual alignment agreements with its customers that would come into effect progressively if the industry agreement received ACCC authorisation.

“Although PWCS already has a successful long-term infrastructure expansion program in place, the new arrangements will allow us to invest in future infrastructure and boost coal throughput in a way never seen in the Hunter,” PWCS general manager Graham Davidson said.

“This will benefit the entire Hunter Valley Coal Chain, the communities that rely on coal exports, and the Australian economy.”

PWCS chair Professor Eileen Doyle commended the contributions made by NSW Ports Minister Joe Tripodi and the Newcastle Ports Corporation.

“This is a significant development for the Hunter coal industry, and all due thanks is passed to the New South Wales government for playing such a critical role in seeing the agreement to fruition,” she said.

Major Hunter Valley producer Coal & Allied has welcomed the progress made.

“Coal & Allied has long held the view that a firm and transparent contracting framework is critical to ensure adequate investment in infrastructure,” Coal & Allied managing director Bill Champion said.

“The Hunter Valley coal industry has been making steady progress in reaching a long-term solution to capacity issues in the coal chain.”

He said the application would help underpin the vital infrastructure needed to ensure the state’s coal industry could be best placed for the recovery in global markets.

The producers that are part of the new plan also include BHP Billiton’s Hunter Valley Energy Coal, Xstrata Coal, Anglo Coal Australia, Integra Coal (Vale Australia), Peabody Pacific, Centennial Coal, Austar (Yancoal Australia), Felix Resources, Gloucester Coal, Whitehaven Coal, Donaldson Coal, Bloomfield and Idemitsu.

NCIG and PWCS are expected to finalise lease amendments and agreements by August 31 for the new framework, due to start up in January next year.

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