EVER since Newcastle was founded, its history has been punctuated by booms and busts in the coal industry.
When prices are high, people rush to take advantage, opening new mines and squabbling over rail and shipping facilities to get their product to market.
Typically, investment booms lead to oversupply and it’s not uncommon for projects at the tail end of a boom cycle to fall short of revenue expectations. The long lead time involved in major resource projects exacerbates this risk.
With all this in mind, many are now asking whether Port Waratah Coal Service’s proposed T4 coal loader will really be needed after all. Some are starting to suggest that this project may have missed the best of the most recent mining and energy boom.
Just a few years ago the sky seemed to be the limit for coal prices. The world – especially the energy-hungry Asian economies – couldn’t get enough steaming coal and margins for high-quality Hunter product rose to unprecedented levels.
In response to immense investment returns in the industry, cash flooded the Hunter Valley and surrounding areas in search of new prospects. Governments pumped money into rail and infrastructure improvements to help the miners shift their product and provide, in the process, royalties and taxes.
The Newcastle Coal Infrastructure Group broke Port Waratah Coal Services’ monopoly on coal-loading at the Port of Newcastle, adding to loader capacity and increasing the complexity of negotiations around loader access for mine operators.
On present figures, there appears to be no need for any extra loader capacity. This year about 125million tonnes of coal are likely to be shipped from Newcastle. That seems comfortably within the ability of existing facilities to handle.
Whether or not the boom is fading, however, investors in loading capacity in Newcastle probably need to consider a longer-term game.
The push by entrepreneur Nathan Tinkler to build his own coal-loader on the former BHP steelworks site at Mayfield gave some inkling of the stakes involved for mine owners hungry to bypass the existing arrangements in the port.
Proceeding with T4 construction may not produce the best or most immediate return on capital. But not proceeding might open a chink for more would-be competitors – if not now, then in the future when demand booms again.
SOME fans of motorcycle sports may be disappointed by the decision of two-time world champion Casey Stoner to quit the sport at the end of the current season.
Most, however, will understand how a young man with a new family might re-evaluate his participation in a notoriously risky pastime.
The boy from Kurri Kurri has achieved great heights through his skill and determination. Chances are those same attributes may be put to work in another field, with rumours of a move to V8 Supercars.
For now it’s enough for fans to thank a wonderful sportsman for a thrilling ride.