PWCS chief executive Hennie du Plooy said the decision to continue operations at Carrington aligned with expectations of the coal industry's outlook, particularly from South-East Asia, where demand for high-quality Hunter Valley Coal remains strong.

This week's edition of Australian Coal Report shows spot prices for thermal coal out of Newcastle at an extraordinary $US170 ($234) a tonne, or more than three times the price of a year ago.

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Mr du Plooy said Carrington would remain a key part of PWCS's operations. It also operates a much larger terminal on Kooragang Island.

"It is critical to being able to meet our customers' needs for terminal capacity and service flexibility now and into the future," Mr du Plooy said.

"Our expectation of the future demand for terminal services is also consistent with the NSW government's policy position - Strategic Statement on Coal Exploration and Mining in NSW - which recognises that coal exports have an important role to play in NSW while there is strong global demand for the product."

Mr du Plooy said this was the first lease negotiation with the new landlord, the privatised Port of Newcastle. Previous negotiations were with the state government.

Asked about options beyond 2031, Mr du Plooy said there were none, but that PWCS ran annual appraisals of its business and would move to extend it closer to the end of the lease if conditions warranted.

"The seven years to 2031 is the period the coal industry was confident with," Mr du Plooy said.

Comment is being sought from nearby residents.

Residents' groups have fought over the years to have PWCS shut the Carrington operation, but without success. Although many opposed the now abandoned T4 loader, its extra capacity would have lessened reliance on Carrington, and may have made its closure commercially feasible.

John Hayes, of the Correct Planning and Consultation for Mayfield group, is also a member of the PWCS consultative committee.

Mr Hayes said the extension of the lease raised the prospect of PWCS being "left with a stranded asset" but that was their commercial consideration to make.

He was concerned, though, about the 25 million tonnes of coal a year he said was railed through suburban Newcastle on its way into the Carrington terminal.

He said a Carrington life extension made a "Portside rail line" all the more important.

Such a line was proposed when BHP first suggested the steelworks site container terminal, running west from the steelworks to join the main northern line at Hexham.

Mr Hayes said a Portside link would start at Dyke Point and service the grain terminals and the coal loader before passing through the steelworks site, and remove all of the coal and freight trains from the Clyde Street and Adamstown level crossings.

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