The Newman government said the expansion strategy proposed by the previous Bligh government was overly ambitious and a more open-ended expansion strategy was needed.
Deputy Premier and State Development Minister Jeff Seeney wrote to the North Queensland Bulk Ports Corporation that the government did not support the expansions as environmental and commercial concerns also remained.
“I believe the fundamental problem with the current multi-cargo facility proposal is the magnitude of what is proposed,” he said.
“The significant scale, complexity and potential impacts of the proposed infrastructure are extensive, and it would be many years before the whole of the planned capacity would be realistically warranted.
“The management of the proposal to date and the various commercial commitments required have created issues and risks for potential proponents".
The expansion will allow for the extra two wharves, one which has been allocated to BHP Billiton and the other to Indian group GVK, which will be operating in partnership with Gina Rinehart's Hancock Coal.
Mining groups have welcomed the revised plans for Abbot Point, which will ultimately carry coal from Clive Palmer and Rinehart’s Galilee Basin planned coal operations.
Enthusiasm waned for the expansion after mining giants Rio Tinto and Vale both pulled out as pressure grows on reining in capital expenditure in uncertain times.
“We continue to see both a sustained upward pressure on costs and long time frames for regulatory approvals," Rio said in its statement in April.
"Rio Tinto's focus at present is evaluating potential alternatives to Abbot Point for additional port capacity."
Queensland Resources Council chief executive Michael Roche said: "QRC has been hearing from our members for some time that the previous government's Abbot Point process was flawed. A fresh look and a more incremental approach seems to be the way to go."
Carabella Resources welcomed the decision to pursue a “more practical and efficient approach to expansion of coal infrastructure at Abbot Point”
Carabella is a 6.67% shareholder in the North Queensland Coal Terminal consortium, which was awarded preferred respondent status for a 30Mtpa tranche of the Abbot Point expansion. The NQCT agreement secures 2Mtpa of port capacity for Carabella.
NQCT has been invited to work closely with the Department of State Development, Infrastructure and Planning and the coordinator general to make capacity expansion at Abbot Point a reality in the shortest possible timeframe.
Carabella managing director Anthony Quin said: “This is an important step for the development of the Abbot Point expansion which will engender a more workable and phased approach leading to better development certainty, better process control and, ultimately, earlier export capacity at lower cost.
“As a key member of the North Queensland Coal Terminal consortium, Carabella looks forward to a positive engagement with government to develop a more practical and efficient approach to the expansion of coal export capacity at Abbot Point.”
Federal Environment Minister Tony Burke is expected to hand down his decision on whether the expansion plans receive environmental approval by the end of the year.
