Agreement on NSW coal export plan

PORT Waratah Coal Services (PWCS) has agreed to an interim coal export plan that will see the so-called ‘Capacity Balancing Scheme’ (CBS) of 2007 extended through to 2008.

The PWCS Board vote followed approval of the extension by the Australian Competition and Consumer Commission (ACCC).

The extension was recently applied for by Newcastle Port Corporation, and will be administered by PWCS.

Under a CBS, coal producers have export allocations rationed on a pro-rata basis when demand for coal exports exceeds the capacity of the Hunter Valley Coal Chain.

The extended CBS will be active from January 1 to December 31 2008, even though Hunter coal producers, coal chain services providers and the NSW Government have agreed to work towards finding a medium-term allocation solution by mid 2008.

It is hoped that a medium term solution, if one can be agreed upon mid next year, will serve the coal chain up until mid 2010.

“The Hunter coal industry has been unable to unanimously agree on how to manage 2008 export coal allocations throughout 2007,” PWCS General Manager Graham Davidson said.

“The roll over of the CBS into 2008 is by no means a permanent solution.

“However, it is a step towards reaching consensus on a coal allocation protocol that is perceived to be fair by the industry.

“There is still a lot of work to be done in terms of solving infrastructure constrains in the Hunter Valley Coal Chain.

“There is an urgent need to create a commercial framework that stimulates investment and encourages stakeholders to work in an aligned manner.”

Davidson said recent discussions between PWCS and the New South Wales Government had canvassed the notion of appointing an independent figure or panel to arbitrate on how coal export allocations are decided.

“PWCS believes that more independence is required to add rigor and transparency to the process of deciding coal export nominations and allocations, in a manner considered fair to all players.

“PWCS is hopeful that the Hunter coal industry and the NSW Government can give strong consideration to appointing a prominent figure or panel to achieve this.

“This would enable PWCS to focus on its core objective of loading coal and continuing its expansion agenda.”


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