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Coal cash jam: need for funds

24 Oct, 2011 03:00 AM
THE Hunter will miss out on continuing record production and investment in Australia’s resources without new port services and rail lines financed by private industry, an expert forecaster says.

Industrial forecaster BIS Shrapnel’s Mining in Australia 2011-2026 report, released today, shows annual investment in mining will exceed $80billion by 2015 as large resource projects including coal and gas continue to expand.

The forecaster’s infrastructure and mining unit senior manager, Adrian Hart, said Newcastle and the Hunter had the potential to share in the growing wealth, but the amount depended on port and rail infrastructure expansion to accommodate coalmining beyond the Liverpool Ranges.

‘‘The Hunter is going to lag behind compared with Queensland, where there is more opportunity to develop new ports and mines,’’ Mr Hart said.

‘‘The Hunter needs a new port that could take 50 to 100million tonnes of coal.

‘‘We don’t expect the ‘T4’ [fourth coal loader at Kooragang] to start until closer to the middle of this decade and we need to sort out rail.’’

The Rio Tinto-backed Port Waratah Coal Services has proposed the $3.5billion T4 fourth terminal, which would provide up to 100million tonnes a year in extra capacity with harbour berths planned at Kooragang and Carrington.

The report said resource industries were shrugging off global economic uncertainty and new domestic taxes on carbon and mining profits to continue to expand.

‘‘Demand for metals and minerals continues to be driven by the long-term industrial development of China and India,’’ the report said.

Mr Hart said miners who wanted to transport more coal to Newcastle port should be prepared to pay for better rail services, as is happening in the Surat Basin in Queensland.

In that state, private companies invested in new infrastructure in much the same way as iron ore companies did in Western Australia.

‘‘They have complete control over rail to their own port,’’ he said.

‘‘In Newcastle, the coal chain has to negotiate with each other for port and rail access and that becomes a lot more complicated.’’ The report also said the Hunter was going to have to fight to keep workers because of the pull of Queensland’s growth.

Nationally, most new investment was going to the oil and gas sector, while investment in coal was expected to increase by 60per cent over the next five years.

Australian manufacturers are losers in the BIS Schrapnel scenario, especially in the liquefied natural gas sector, because steel production and fabrication work is going to Asia.

‘‘Work is effectively being exported overseas,’’ the report said.

Temporary migrant workers would be used in the construction phase of most big projects.

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