The ACCC said the capacity framework arrangements have facilitated and stimulated significant coal industry investment and provided a platform of certainty for producers and that terminal access for new entrants is primarily addressed through the obligation to build terminal capacity in accordance with contracts entered into with producers, PWCS general manager Graham Davidson said.
The ACCC said there is no evidence to suggest producers are hoarding terminal capacity or over-nominating terminal capacity and the PWCS is delivering Newcastle’s proposed fourth coal loader – Terminal 4 (T4) – “expediently”, he said.
“It is pleasing that the ACCC has acknowledged the effectiveness of the long-term plan, and the fact that it is operating as intended,” he said.
“This echoes very strong sentiments aired by a majority of Hunter Valley coal chain producers and stakeholders, who very clearly support the plan.
“It is important that the industry remain united by the plan, and that PWCS be allowed to remain focussed on delivering current terminal expansions and the Terminal 4 project in the quickest time frame possible.”
An agreement with Hunter Valley Coal industry for the long-term commercial framework came into effect in January 2010.
It purports to enable Hunter Valley coal producers to enter into long-term 10-year “take or pay” contracts with PWCS, ensuring PWCS can build terminal capacity in a “timely and orderly manner”
Hunter Valley Coal Chain stakeholders recently made submissions to the ACCC summarising their views of the capacity framework arrangements, with a majority of incumbent producers expressing support for the plan.
Aston is hoping to secure surplus capacity from other Port of Newcastle users to handle the ramp-up of coal exports from its Maules Creek mine after PWCS offered less capacity than requested.
The company is also critical of the capacity framework arrangements which regulate the process of capacity allocation at the Port of Newcastle, claiming they discriminate against new entrants, Aston chief executive officer Todd Hannigan said.
“This is a disappointing outcome for the New South Wales coal industry and demonstrates that, at the first critical test, the capacity framework arrangements have failed to deliver a balanced long-term solution,” Hannigan said of the capacity framework arrangements.
“The capacity framework arrangements have allowed incumbent producers to lock up excess growth capacity at the Port of Newcastle, with the potential for the government to forego significant amounts in new royalties and other taxes from emerging coal producers.”
