T4 delayed again as options explored

PLANS for the controversial T4 coal-loader might be shelved if the coal slump continues.

This dramatic turn of events was confirmedon Tuesday by Port Waratah Coal Services chief executive Hennie du Plooy at a vineyards coal conference.

 After years of promoting T4 as the centrepiece of the port’s expansion, Mr du Plooy said falling demand meant PWCS was considering expanding its existing Kooragang loader as an alternative to T4.

He said the increasingly complex approvals process had added another year to the schedule, and T4 was unlikely to be approved before late 2014.

Construction would take another three years at least, meaning the earliest the terminal would be ready was 2018.

When PWCS announced the project in 2010, the target date for operation was 2015.

As well as delays with approvals, Mr du Plooy said PWCS and T4 had become ‘‘a focal point’’ for coal protesters.

One group, Rivers SOS, ran protests outside the conference on both days.

‘‘There is no doubt the anti-coal lobby is making good on its commitment to specifically target T4 with the aim of stopping it to stop further expansion of the Hunter Valley coal industry,’’ Mr du Plooy said.

As Mr du Plooy told the Australasian Institute of Mining and Metallurgy conference, T4 was part of a co-operative industry plan overseen by former premier Nick Greiner to co-ordinate the expansion of port and rail facilities in time with new coalmines.

Under this scheme, coal companies have signed 10-year ‘‘take-or-pay’’ contracts that lock them into providing coal, while the terminal and rail companies must provide the infrastructure.

The contracts looked attractive when prices were booming, but various speakers told the two-day conference that the rail contracts, especially, were adding heavily to coal company costs during the downturn.

T4 was ‘‘triggered’’ in late 2011 when coal companies signed contracts to ship 176million tonnes in 2016 – well above the 145million-tonne capacity of the PWCS Carrington and Kooragang terminals.

But as figures Mr du Plooy provided to the conference made clear, PWCS’s customers are now shipping almost 20per cent less than they are contracted to provide, and the gap is widening.

Last year they shipped less than 106million tonnes and are predicted to do 110million this year.

Mr du Plooy said the ‘‘trigger’’ contracts were still in place but PWCS was talking to its customers and would soon know how much capacity was needed.

Given the state of the industry, it made more sense to squeeze as much out of existing capacity – even if it meant seeking government approval to expand Kooragang – rather than build a big new terminal that might not be needed.

Weighing T4 against expanding the existing Kooragang terminal, Mr du Plooy told the conference: ‘‘I haven’t made a judgment about which one is more likely.

‘‘As we get clarity on what the real capacity shortfall is – and, importantly, when any additional capacity can actually get through the coal chain – we will make a call on which is more likely.

‘‘There are certain levels of capacity shortfall we would be able to meet through the existing terminals but clearly if it was significant then the new terminal would end up being more likely,’’ Mr du Plooy said. 

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