Newcastle coal – Loading Questions

The Hunter Valley needs a new coal loader at Newcastle. As one of the world's major coal ports, rivalling its namesake, the tonnage shipped through Newcastle is astounding.

The need for another coal loader has been apparent for some time, with log jams across the Hunter Valley Coal Chain caused by backups at the port, and rising numbers of ships lining the coast from Newcastle down to the Central Coast.

And while the Chinese and Indian companies which receive the coal do not really care whether a new loader is run by Port Waratah Coal services or Nathan Tinkler's Hunter Ports, the people who live in Newcastle and the State Government do.

In 2009, Port Waratah was given the opportunity to build a new coal loading terminal, known as Terminal 4 (or T4), as part of a wider long term agreement to service the Hunter's growing coal industry.

This was in addition to the two it already operates – the Carrington and Kooragang Coal Terminals. In 2010 the company began planning the export site's development.

However the ball only really started rolling last year as Port Waratah Coal Services announced its 'Project 145', which was a plan to grow the loader's capacity at Newcastle by an extra 145 million tonnes annually.

The $230 million project includes the construction of a fourth rail dump station, track infrastructure, upgrades to the buck-wheel reclaimers and ship-loading amenities.

It also included the new T4 coal loader.

Yet this was not the only new coal loader planned for the region.

Mining magnate Nathan Tinkler had also put forth an application for a new coal loader and container terminal on what was previously the site of the BHP Billiton steelworks at Mayfield, via his company Hunter Ports.

This new coal loader was to be known as Terminal 5 (or T5).

Tinkler's plan for the development of the site would include a coal loader, conveyor belt, two shipping berths as well as an upgraded rail system.

In June last year the NSW Government finally endorsed Port Waratah's application to amend harbour shipping, a major step forward for the loader.

The application stated that the NSW Government "endorsed terms for the construction of a fourth coal terminal at the port, should conditions be met.

"In support of the NSW Government's commitment to further development of export capacity within the port of Newcastle, [the port corporation] has made the decision to amend the location of the swing basin," the application said.

"These changes are required to facilitate further expansion of coal-loading facilities on Kooragang Island upstream of the swing basin."

The month also saw Tinkler put his application on the table.

While he outlined the port's development timeline, Tinkler also took the time to criticise Port Waratah as well as the Newcastle Port Corporation itself.

The two came to a head as the government was only prepared to approve one new loader.

Tinkler pushed his $2.5 billion proposal as one which was 'more friendly' to the local region, and promised to remove the majority of freight trains through Mayfield.

Hunter Ports managing director Steve van Barneveld explained that "a highlight of our plan is to create a new rail corridor through the industrial land adjacent to the Hunter River.

"This will remove an estimated 90% of coal trains from the main north-south line, permitting the closure of the Mayfield rail corridor and transforming the surrounding communities.

"Our proposed rail corridor can also service other port-related industries, removing current and future heavy trucks from industrial areas."

Hunter Ports claimed that this coal terminal will 'set new benchmarks in environmental and operational standards' as well.

The company also claimed that it would be able to create a new 'green belt' along the Mayfield rail corridor.

Soon after the lodging of his proposal, Tinkler announced that Terminal 5's size would double.

The new proposal aimed to handle up to 100 million tonnes of coal per annum.

However, Tinkler's Hunter Ports proposal quickly saw opposition not only from its competition Port Waratah, but also the Hunter Development Corporation, the Newcastle Port Corporation, and local politicians. 

Port Waratah was the most vocal in its opposition.

PWCS CEO Hennie du Plooy said Tinkler's proposal 'undermined' and weakend the entire commercial framework for the Hunter Valley Coal Chain.

"The [proposed Tinkler T4 terminal] doesn't currently fit into the long-term commercial framework," du Plooy said.

"It would need to fit with that commercial framework."

Barneveld dismissed this, stating that the T5 loader would create more certainty and jobs for the region than the T4 proposal.

Jodi McKay, the NSW minister for the Hunter, believed that the T5 coal loader could not exist on the same site as a container terminal.

She said that when the State government body Newcastle Port Corporation (NPC) originally put the plans forward for a multipurpose facility on site, it did not include either a coal loader or terminal for the shipment of coal.

"There was no proposal for a coal loader when the original tender was put forward."

McKay went on to say that she did not "support a coal loader on site because it is too just close to Mayfield".

The T5 was rejected in January this year, with the government instead giving development approval to Port Waratah's T4 coal loader.

According to the government assessment "the proposal's benefits were outweighed by its potentially adverse effects".

It went on to say that the construction of the coal loader created uncertainty in the industry as it could potentially jeopardise existing coal agreements at Port Waratah's new port.

Port Waratah Coal Services said the decision of the O'Farrell Government to reject Tinkler's Hunter Ports' Terminal 5 provides certainty for the region, adding that its proposed T4 loader will provide the Hunter Valley with enough coal loading capacity.

As part of the Hunter Valley Coal Chain plan "the industry very clearly asked PWCS to deliver T4 to provide the next tranches of coal loading capacity," Port Waratah said. It went on to attack Tinkler's proposal, stating that T5 "was an incomplete concept from outside the industry framework, and did not appear to have been costed or modelled against the overall coal chain".

Since this time, the T4 coal loader's $5 billion proposal has gone public and drawn criticism from environmental groups, particularly over its dust management claims.

"Anybody who lives in Newcastle knows there is a blanketing of coal dust in many suburbs close to the coal loaders every day of the year, 365 days," Correct Planning and Consultation for Mayfield spokesperson John Hayes told The Newcastle Herald.

"There's a widespread view that spraying water and dust on the coal dust piles doesn't do much to suppress dust.

"There's also a widespread view that with the monitoring that takes place, frequently that the monitors aren't in the right position."

PWCS expansion will create 2000 jobs during construction and 400 during operations.


To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.