The Hunter Valley Coal Chain has moved closer towards a reliable long-term contractual framework, according to Port Waratah Coal Services (PWCS), with a comprehensive industry agreement finally being signed and lodged with the Australian Consumer and Competition Commission (ACCC).
The ACCC is expected to make a decision on the application by the end of July.
The agreement is a three-way deal between the Hunter Valley coal industry (through Port Waratah Coal Services and the Newcastle Coal Infrastructure Group), and the New South Wales Government (through Newcastle Port Corporation).
PWCS said a central feature of the agreement was the ability for it to enter into long-term contracts with its coal producing customers, providing a foundation for long term operational and investment certainty.
According to PWCS, an issue with growing coal exports from the Hunter Valley has been the Kooragang Island ‘Common User’ provision — an historic New South Wales Government clause written into PWCS’ lease to ensure that PWCS accepts any vessel at any time.
“This created uncertainty in terms of long-term terminal and coal chain investment and planning,” PWCS said yesterday in a statement.
“Under the new agreement the Common User clause is suspended, enabling PWCS to lock into ten-year contracts with customers.”
PWCS has been given the opportunity to build a new coal loading terminal on Kooragang Island (to be known as T4), enabling it to have sufficient infrastructure in place to satisfy customer demand.
PWCS said it was currently in the process of sorting out contractual alignment arrangements with its customers that could come into effect progressively if the industry agreement is authorised by the ACCC.
“The agreement is historic and a very welcome development for the Hunter Valley coal industry,” PWCS General Manager Graham Davidson said.
“Although PWCS already has a successful long-term infrastructure expansion program in place, the new arrangements will allow us to invest in future infrastructure and boost coal throughput in a way never seen in the Hunter.
“This will benefit the entire Hunter Valley Coal Chain, the communities that rely on coal exports, and the Australian economy.”