PORT Waratah Coal Services says the Port of Newcastle will continue in its role as the world’s largest coal port even though the $3.5-billion T4 coal loader has been formally cancelled.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
PWCS chief executive Hennie du Plooy ended three years of speculation on Thursday when he announced that the project, formally approved in 2015 after six years of planning, would not go ahead.
Mr du Plooy said PWCS planned to relinquish a large part of the site that was needed for the loader, which was leased originally from the state government and subsequently from the privatised Port of Newcastle.
As the story developed:
T4’s environmental and community opponents have welcomed the announcement, while seeing Newcastle’s status as the world’s largest coal port as something to be criticised, not celebrated.
Some have also called for the abandonment of T4 to be used by the Port of Newcastle as an impetus in the push for a container terminal.
Mr du Plooy said it would have cost $100 million over a decade to keep leasing the site. After accepting that coal exports were not going to reach PWCS’s capacity of 145 million tonnes in the foreseeable future, it was the right thing “financially” to formally end the project.
The bullish predictions of coal demand that led PWCS to plan for T4 never eventuated, meaning the port has more than 20 per cent spare capacity at the existing three loaders, two of which are operated by PWCS.
The third is owned by Newcastle Coal Infrastructure Group, or NCIG. All up, the port can handle 210 million tonnes of coal a year, whereas this year’s throughput is likely to be 165 million tonnes, leaving 45 million tonnes of spare capacity.
Environmental Justice Australia researcher James Whelan praised the end of T4 as a step towards environmental justice for the people of Newcastle.
“But even without T4, we remain the world’s largest coal terminal and experience an unfair burden - air and water pollution, uncovered coal trains and stockpiles, a devastated natural environment and an economy that relies too heavily on the declining coal industry,” Dr Whelan said.
“With the coal industry in structural decline globally, Newcastle and other communities need careful planning that involves community, industry and all levels of government to create a diverse and healthy economy. Now is the time for that planning to commence in earnest."
Read more:
T4 was originally touted as a $5 billion project that could handle 70 million tonnes of coal a year, with wharves on both sides of the river. By the time it was approved in 2015 it had a first stage capacity of 25 million tonnes. Mr du Plooy said on Thursday that its final cost had been $3.5 billion, including $1 billion for dredging of the Hunter River almost up the Tourle Street bridge linking Mayfield with Kooragang Island.
Mr du Plooy said PWCS had consulted widely before concluding its existing terminals were sufficient to cater for future growth in exports. It had spent about $90 million all up on T4, money that would have to be “written off”.
He said market conditions for Hunter coal were strong, with exports stable at near-record levels, and prices for the main product, Newcastle steaming coal for power stations, back above $US100 ($132) a tonne.
“While PWCS will not build a fourth terminal, coal constitutes the bulk of Newcastle port volumes and will remain a big part of Newcastle’s future,” Mr du Plooy said. “Coal is a key component of the global energy mix and is forecast to remain so for the foreseeable future, particularly in our core markets in South East Asia.”
Breaking the port into its three terminals, PWCS’s Carrington terminal is licensed to handle 25 million tonnes a year and its Kooragang terminal 120 million tonnes, giving a combined capacity of 145 million tonnes. NCIG’s Carrington terminal can handle 66 million tonnes.
PWCS exported 105 million tonnes last year. NCIG does not publish official figures but is likely to export 60 million tonnes this year.
Despite speculation at the time that T4 might allow PWCS to close the Carrington loader, Mr du Plooy said it would stay open, with negotiations under way to extend its lease with the Port of Newcastle past 2024.
He said most of the T4 site had been remediated by the Hunter Development Corporation but PWCS had remediation commitments of about $15 million on the two parts of the site it owned. It would keep the environmental offset lands it had bought as part of T4’s approval.
Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Matthew Kelly
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
