Plans for a $5 billion coal terminal in the world's biggest coal port in Newcastle have been scrapped.
The huge investment to expand Newcastle's coal export capabilities was first announced in 2009 after thermal coal prices soared.
The loader, known as Terminal 4 or T4, was to be operated by Port Waratah Coal Services (PWCS) and was approved in 2015 despite a strong opposition from community and environmental groups. But PWCS says it now wants the T4 Agreement for lease to lapse when it expires in 2019, which will allow it to save around $100 million in land lease fees.
Existing terminals can cope with extra load
PWCS Chief Executive Officer Hennie du Plooy said Port Waratah had consulted with a full range of industry stakeholders. He said his company concluded that the capacity of the existing coal terminals, including potential expansion options, are likely to be sufficient to cater for future growth in coal exports.
"Market conditions for Hunter Valley coal are strong, with Newcastle exports stable near record levels and prices are once again above US$100 per tonne," Mr du Plooy said. "At Port Waratah's terminals 105 million tonnes were loaded in 2017 and incremental growth is expected this year. "With significant growth capacity available in the existing terminals, we do not expect that the conditions to support an investment of the large and long-term nature of Terminal 4." "We are proud of the role our Carrington and Kooragang terminals play in connecting Hunter Valley coal with the world. "We are confident that with ongoing investment in the reliability and performance of these terminals, we will be well positioned and flexible enough to adjust quickly to changes in demand."
Green groups claim massive win
The group Environmental Justice Australia (EJA) has applauded the decision to scrap T4."I think most community members and most community groups in Newcastle will see this as a huge win and a very positive thing for the future of Newcastle," EJA spokesman James Whelan said. "Globally coal is in decline. It's hitting home in Newcastle. We're a city ready to embrace the future. "It took a long time for the NSW Government to give approval to this coal terminal and even when it did, it came with some very stringent conditions before the development could go ahead. "The coal terminal was going to impact on air pollution, water pollution, the environment on Kooragang island, more uncovered coal wagons, more uncovered coal piles. So not entirely a surprise, but very very welcome."
Minerals Council upbeat
The New South Wales Minerals Council said coal exports through Newcastle were expected to continue at, or near, record levels. "Newcastle will continue to be home to the world's largest coal export port following the announcement from Port Waratah Coal Services on the future of T4," Council CEO Stephen Galilee said. "Coal export volumes through the Port of Newcastle are at or near record levels, and this is expected to continue, with existing terminal infrastructure capable of handling further increases in export volumes. "Newcastle's existing coal export infrastructure is highly efficient, providing flexibility of service for ships of different sizes, and has capacity to manage export volumes around 30 percent higher than current record levels. "This is sufficient to cater for any expected increased demand in the medium term and potential increased production from new and developing future NSW coal projects."