FOR a number of years, coal export capacity limitations at the Port of Newcastle in NSW resulted in uncertainty for coal producers expanding or developing new mines.
In 2004, with significant new port capacity required, six companies – BHP Billiton, Peabody Energy, Centennial Coal, Whitehaven Coal Yancoal and Donaldson Coal (recently acquired by Yancoal) – joined forces to form Newcastle Coal Infrastructure Group (NCIG) with the aim of increasing their respective export capacities through the Port of Newcastle: the world’s leading coal export facility.
All members of the NCIG are significant coal companies looking to increase their combined production by more than 30 million tonnes during the next 5 to 10 years. BHP Billiton, the world largest producer of steelmaking coal, committed $833 million in June this year to opening a new mine at its Illawarra Coal operation in NSW.
Peabody Energy controls three mines in NSW – the Metropolitan underground mine, the Wambo open-cut and underground operation, and its Wilpinjong open-cut mine – extending from the Hunter Valley west of Newcastle to the southern coalfields north of Wollongong.
Centennial Coal’s production fuels about 40 per cent of NSW’s coal-fired electricity generating capacity: the company boasts 10 operating mines in NSW and more than 1800 employees, making it one of the state’s largest underground coal producers.
Whitehaven Coal, which has an 11 per cent stake in NCIG, has become an emerging force in the Australian coal industry. It has a market capitalisation of about $5 billion complemented by a high-quality selection of producing mines and coal mining developments.
Yancoal operates seven mines in some of the country’s richest coal reserves in NSW and Queensland.
It acquired Donaldson Coal’s NCIG stake when it successfully merged with Gloucester Coal – who obtained Donaldson Coal in May 2011 – earlier this year.
In September 2004, the NSW Government called for expressions of interest for the use of a vacant 136 hectare site on Kooragang Island in the Hunter River. NCIG was named the successful applicant in August 2005, and acquired a 35-year lease on the Kooragang Island site. The group received NSW Government approval to build and operate a third coal export terminal in the Port of Newcastle.
Approval for the new coal terminal was granted in April 2007 and the finance agreement was signed in January 2008, with construction starting the following month.
Construction has been split into three phases – Stage 1, Stage 2AA, and Stage 2F – that will facilitate total coal exports of 30 million tonnes per annum, 53mtpa and 66mtpa respectively, for a total cost of $3 billion.
NCIG engaged Aurecon Hatch, a joint venture between management and engineering consultancies Aurecon and Hatch, to assist with the development of the terminal from initial planning through to final commissioning.
During the construction of Stage 1, about 4800 people were inducted to work on site, with up to 800 people on site on any given day. It has been reported that Stage 1 of the project created up to 500 new jobs, as companies developed new infrastructure, including rail lines and roads, to support the coal chain.
The NCIG coal export terminal could generate thousands of well-paid jobs in regional NSW for decades to come.
Stage 1, completed in a little more than two years and officially opened on May 3, 2010, comprised shiploading facilities built to the west of existing Kooragang Island shiploaders. A new stockyard and rail facilities were also built south west of the Kooragang Coal Terminal. As part of the development, the south arm of the Hunter Riverwas dredged and deepened to allow ships to reach K8 and K9 berths to the west of the Kooragang loader. A rail loop, dump station, stacker and reclaimer and wharf facilities were also constructed on the site.
The receival system allows for an inbound rate of 8500t per hour, with the rail system including two turnouts off the main line (in and out), three rail sidings and one balloon loop. The inbound plant components include a rail dump station, single dump hopper with belt feeder, three conveyors and a sampling station.
The first trainload of coal for export arrived at the new terminal in late March 2010, on completion of Stage 1 construction. The then-NSW Ports and Waterways minister Paul McLeay said that the train carried 7200t of coal from Peabody Energy’s Wambo mine onto the rail loop at the NCIG terminal. He said that Queensland
Rail hauled the maiden export load, which formed part of the trial shipment of coal from the new terminal.
Stage 2AA Construction of the second phase, Stage 2AA, was completed early and under budget in July this year, increasing terminal capacity from 30mtpa to 53mtpa.
In August 2010 the NCIG board approved construction of Stage 2AA, which incorporated a new rail unloading facility; an additional stacker and reclaimer, stockyards and conveyors; and sample stations and a shiploader.
The official opening of Stage 2AA took place on July 24 in front of about 200 attendees.
NCIG chairman and former NSW treasurer Michael Egan said the loader was built ahead of time, under budget and without any lost time injuries.
Despite increasing concern that the mining boom had peaked, Mr Egan said the partners were confident that the Newcastle export trade would continue to thrive.
At the PACE Zenith Awards in July, Aurecon Hatch won the Transport, Power and Infrastructure category for its NCIG coal export terminal control system, while also taking out the overall Project of the Year award.
As part of the ongoing engineering, procurement and construction management services for NCIG, Aurecon Hatch managed 11 different supply contracts, incorporating high voltage (HV) switchgear, transformers, 415v motor control centres, HV cables, power factor correction equipment, a wagon vibrator, conveyor drive units, pulleys, conveyor belting, vibrating feeders and sample plant modifications.
The NCIG coal export terminal entered its third phase of development in July 2012 with the start of Stage 2F, which will further expand the capacity of the terminal to 66mtpa.
Stage 2F is expected to be in full operation by mid 2013, with the works including construction or provision of: a new stacker and reclaimer; inbound/outbound complete conveyor systems including electro-mechanical drives; sampling, dust and fire protection; and rail loop systems; belt weighers and cleaners; a rail turnout; and civil and bulk earthworks.
Despite plunging coal prices, a July 2012 report by the Bureau of Resources and Energy Economics found that provision of a fourth coal terminal at the Port of Newcastle was crucial to satisfy overseas demand for thermal coal. Bureau experts believe that by 2025, Australia’s thermal coal exports will increase from 119mtpa to 235mtpa.
However, Bureau resources manager Alan Copeland said that the spike in exports would rely on the Hunter Valley’s infrastructure keeping pace with demand. He
said that for the Hunter Valley to continue growing exports beyond the medium term the development of the fourth coal terminal, which has been progressing through a number of approval processes, was integral. Mr Copeland added that future mine expansions and developments in the region were expected to drive
much of the growth.
The Bureau’s report indentified that infrastructure was already limiting the production of coal in the region. The recommendations for infrastructure investment included implementing the Australian Rail Track Corporation Rail Infrastructure Strategy to expand rail capacity; further upgrades to existing coal loaders at the Port Waratah Coal Services and NCIG terminals at the Port of Newcastle; and the building of new loaders as required.