A LIKELY slowing of the coal boom means Newcastle could be left with substantial port over-capacity if the T4 terminal is built to its full size.
That's the view of industry players including Newcastle Port Corporation, which says T4 as planned would have a "buffer of around 20 per cent above the 275 million tonnes per annum" maximum demand it predicts for Newcastle coal exports between 2025 and 2040.
In a similar vein, veteran coal industry analyst Colin Barnett has been telling coal conferences that Newcastle and other east coast coal chains are "relentlessly moving to over-supply" as they expand to bullish predictions of coal companies made before the recent softening of the market.
Hunter thermal coal has fallen to about $100 a tonne in recent weeks.
Production costs of $75 a tonne or more mean that margins are much thinner than they were at the height of the boom.
Few if any Hunter mines are operating to their full approved capacities and a number of unbuilt projects - including Rio Tinto's Mount Pleasant mine near Muswellbrook - seem unlikely to be developed to their original timetables.
But loader operators Port Waratah Coal Services and Newcastle Coal Infrastructure Group are both still expanding their capacities, citing "take or pay" contracts with coal companies that mean the coal-loaders are paid regardless of whether the coal is shipped.
The take or pay contracts are a result of a series of "capacity framework agreements" hammered out in 2009 under the organising hand of former premier Nick Greiner.
But the predicted downturn in demand and softening of profits has focused attention on the costs of the contracts.
All up, T4 and the existing PWCS and NCIG loaders would give the port the capacity to shift 331 million tonnes a year but Newcastle's 2011 exports totalled just 114 million tonnes.
The 2012 total is likely to be about 125 million tonnes.
In a submission on T4, Greens lord mayoral candidate John Sutton said the loader's environmental assessment contained no detailed breakdown of the claimed demand for the new loader, which was "remarkable" given it was the main reason PWCS said it needed to be built.