Coal exports through Newcastle are expected to continue at or near record levels and the city will continue to be home to the world’s largest coal export port following the announcement from Port Waratah Coal Services on the future of Terminal 4.

Today, Port Waratah announced (see below statement) that they have made the decision to allow the Terminal 4 Agreement for Lease to lapse in August next year, based largely on the fact that existing coal terminals are likely to be sufficient to cater for any future growth.

Plans for Port Waratah’s Terminal 4 to be shelved

NSW Minerals Council CEO, Stephen Galilee said today that coal export volumes through the Port of Newcastle are at or near record levels, and this is expected to continue, with existing terminal infrastructure capable of handling further increases in export volumes arising from further increases in global demand.”

“Newcastle’s existing coal export infrastructure is highly efficient, providing flexibility of service for ships of different sizes, and has capacity to manage export volumes around 30 percent higher than current record levels. This is sufficient to cater for any expected increased demand in the medium term and potential increased production from new and developing future NSW coal projects,” he said.

According to the independent International Energy Agency (IEA) global demand for coal is forecast to increase 3.2 percent to 5,534 Mtce between now and 2022.

Plans for Port Waratah’s Terminal 4 to be shelved

The IEA also expects Australia’s share of the international coal trade to increase from 34 percent in 2016 to 42 percent in 2040.  

In this context, the outlook for NSW coal exports is strong. Exports of thermal coal to China increased last year, and exports to Japan rose by 2.4% to 64.3 million tonnes. Exports to Korea rose by 0.6% to 20.1 million tonnes.

Demand for NSW energy coal also increased across other emerging Asian markets with NSW coal export volumes to the Philippines increasing by 17% to 1.5 million tonnes and to Thailand by 7% to 3.2 million tonnes.

Port Waratah Coal Services cans T4

‘Port Waratah Coal Services has advised the Port of Newcastle that it intends to allow the Terminal 4 Agreement for Lease to lapse when it expires in August 2019, Chief Executive Officer Hennie du Plooy said today. This means that Port Waratah does not intend to proceed with the Terminal 4 development.

Mr du Plooy said Port Waratah has consulted with a full range of industry stakeholders and concluded that the capacity of the existing coal terminals, including potential expansion options, are likely to be sufficient to cater for future growth in coal exports.

Market conditions for Hunter Valley coal are strong, with Newcastle exports stable near record levels and prices are once again above US$100 per tonne. At Port Waratah’s terminals 105 million tonnes were loaded in 2017 and incremental growth is expected this year.

“With significant growth capacity available in the existing terminals, we do not expect that the conditions to support an investment of the large and long-term nature of Terminal 4 will be in place before the development approval lapses in September 2020,” Mr du Plooy said.

“We are proud of the role our Carrington and Kooragang terminals play in connecting Hunter Valley coal with the world and we are confident that with ongoing investment in the reliability and performance of these terminals, we will be well positioned and flexible enough to adjust quickly to changes in demand.”

While Port Waratah will not build a fourth terminal, coal constitutes the bulk of Newcastle port volumes and will remain a big part of Newcastle’s future. “Coal is a key component of the global energy mix and is forecast to remain so for the foreseeable future, particularly in our core markets in South East Asia,” Mr du Plooy said.

“We are committed to understanding and meeting the expectations of our stakeholders, particularly in limiting noise, reducing dust and water usage, and creating the smallest environmental footprint that we can. We continue to make significant investments in our terminals, to improve both operational and environmental performance.”

Mr du Plooy said that as part of the company’s commitment to keep stakeholders and the community informed on the status of the T4 proposal, Port Waratah was making the statement as soon as possible.’