In January the Western Australian Environmental Protection Authority gave approval for BHP Billiton’s Iron Ore Port Expansion project at Port Hedland. Including rail and ore stockpile facilities as well as a four kilometre jetty offshore of Finucane Island, construction will take eight years and capacity per
annum will be a monumental 240mt (million tonnes). The decision was yet more confirmation that
Australia will not let infrastructure shortcomings stand in the way of its export industries, a failing that has marred much of the last decade. This new determination is most obvious in the coal sector where Australia’s miners are committed to clawing the back market share lost to rival suppliers in Indonesia in recent years.
The new coal infrastructure in the pipeline encompasses not just investments in new terminals but entire pit-to-port projects designed to reduce delivered costs by generating huge economies of scale. Bede Boyle, chairman, AustCoal Consulting Alliance, called the strategy the creation of “rivers of steel” late last year when he addressed delegates at the McCloskey Asia Pacific Coal Outlook Conference 2011 held in Bali, Indonesia.
Boyle predicted that Australia’s port capacity would reach 1,150mt within eight years — more than enough to handle rising met and thermal coal exports, which he said would rise to around 500mt in three years and over 900mt by 2020. Given that last year’s total global seaborne coal shipments totalled just under 1bn tonnes and Australia supplied less
than a third, the planned increase in export capacity is without historical precedent, and predicated on a huge rise in import demand from India, China and South East Asia.
The increase in capacity will see east coast ports and terminals such as Gladstone, Newcastle and Hay Point undertake huge upgrade programmes in the coming years. However, the most significant of these projects will be at the Port of Abbot Point, located 25 kilometres from Bowen on Central Queensland’s coastline.
Late last year the Queensland Government announced the successful ‘Preferred Respondents’ selected to build six new coal terminals at the port, the outcome of a call for expressions of interest by North Queensland Bulk Ports Corporation (NQBP) instigated in mid-2011.
Anglo American Metallurgical Coal, Macmines Austasia, North Queensland Coal Terminal, Rio Tinto Coal,Vale, and Waratah Coal have all now entered negotiations with the port with commercial agreements scheduled to be drawn up by mid-2012. Once all is agreed, six new stockpile terminals each of annual capacity of 30mt will be built — one for each respondent and called Terminals 4 through 9 [the development is called the T4-9 Project]. Construction is expected to start in 2014 and operations should commence in 2017.
Elsewhere at the port, as previously reported in DCI, other developments include a new multi-cargo facility which will provide 12 Capesize berths for coal exports which the T4-9 operators will use for loading, and additional expansions by Adani Mining, BHP Billiton and Hancock Coal.
Even without the billions of dollars to be invested in rail and mines to support exports, construction costs for T4-9 are expected to be around Aus$9 billion, with an additional $2 billion for the MCF.
Once completed, total port capacity at Abbot Point will rise from 50mt at present to almost 400mt within around five years. To put that in context,Abbot Point’s capacity will be higher in five years than total Australian coal exports in 2011.