(Updates with company comment in fifth paragraph.)
Nov. 29 (Bloomberg) -- Billionaire Nathan Tinkler proposed building a A$2.5 billion ($2.47 billion) coal export terminal in Newcastle, Australia, to compete with one proposed by Port Waratah Coal Services Ltd.
The terminal will add 100 million metric tons of export capacity if approved by the New South Wales state government, Tinkler’s Hunter Ports Pty said today in a statement on its website. That would double the amount being shipped annually from the world’s biggest thermal coal port. Port Waratah has proposed a A$5 billion plan to add 120 million tons of capacity.
“Port Waratah’s view is that this just does not fit with the broader plan, and not only that, it seriously risks jeopardizing the broader Hunter Valley coal industry export plan,” Matthew Watson, a spokesman for the operator of two export terminals at Newcastle, said by phone. “Port Waratah has started entering into contracts with Hunter Valley coal producers.”
Resource companies are planning A$430 billion of projects in Australia, the world’s biggest exporter of coal, iron ore and alumina, to meet demand from Asia. Coal exporters are facing bottlenecks as railroads and ports have struggled to cope with the increased demand, resulting in regular queues of ships waiting to load.
The planned terminal, subject to state government approval to use the proposed site, may start exports from 2015 “or sooner,” Steve van Barneveld, managing director of Hunter Ports, told reporters today in Sydney.
Existing coal mines and projects in and around the Hunter Valley, where Rio Tinto Group and Xstrata Plc own mines, would support additional annual exports of 65 million to 90 million tons of coal “if there is the infrastructure,” Hunter Ports said.
Japanese trading houses and Chinese parties have shown interest in providing “equity backing” for the project, Mark Rowsthorn, head of Tinkler’s International Ports & Logistics, said at the meeting. Rowsthorn joined in August after his previous role as chief executive officer of Asciano Ltd., Australia’s largest port operator.
Tinkler, an electrician-turned-resources entrepreneur, is also chairman and largest shareholder of Brisbane-based Aston Resources Ltd., which is developing the Maules Creek coal mine in New South Wales. Tinkler, who’s other business interests include a rail developer and racehorses, said Nov. 17 that he plans to buy more coal assets in the region. Aston plans to export coal from Maules Creek through Newcastle.
Port Waratah plans to lodge its environmental assessment with the state Department of Planning and Newcastle Port Corporation tomorrow, it said in a statement on its website.
Hunter Ports, which is based in Newcastle, aims to start a community engagement program and information sessions during the next two weeks. Following assessment of the proposal by the NSW government, Hunter Ports will prepare an environmental impact statement, it said.
Newcastle Port Corporation considers Koorangang Island, the site of Port Waratah’s proposed terminal as the best location for an additional loader, it said in an e-mailed statement. Newcastle Port said it has a lease agreement with Port Waratah built on the back of the Hunter Coal Export Framework that is supported by the coal industry and the Australian Competition and Consumer Commission, the e-mail said.
A spokeswoman at the New South Wales Department of Planning wasn’t immediately able to comment. The port of Newcastle is located about 125 kilometers (70 miles) north-northeast of Sydney.
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