THE world’s largest coal handling facility is intending to phase in a further 120 million tonnes of shiploading capacity from 2015, providing expansion plans come to fruition.
Port Waratah Coal Services (PWCS) currently operates two coal loading facilities at NSW’s Newcastle Port: the Carrington Coal Terminal and the Kooragang Coal Terminal. Both receive,
assemble and load Hunter Valley coal for export, and currently have a combined capacity of 133 million tonnes per annum.
During the past 12 years, PWCS has committed $1.8 billion towards terminal expansion to improve its coal handling efficiency and provide the required loading capacity for Hunter Valley coal
PWCS commenced investigations into the feasibility of extending its Kooragang facility more than two years ago, and is now working through state and federal government approval processes.
Subject to planning approvals (a final decision is expected by the end of the year), the $5 billion Terminal 4 (T4) Project will see the construction of coal stockyards, rail facilities, wharves
and shiploading facilities to meet the ongoing expansion of the coal industry in the Hunter Valley and the increasing global demand for energy. While awaiting approvals for T4, PWCS expects to complete work on its Project 145 by the end of the year. This will increase its total coal loading capacity at Kooragang and Carrington to 145mtpa: the maximum throughput PWCS can accommodate under existing planning approvals, hence the need for T4.
Current terminals and capacity The Carrington Coal Terminal, which sits on 51 hectares of land at Carrington, began operations in 1976 with an initial shiploading capacity of 16mtpa. However, expansions have increased its loading capacity to its current maximum capacity of 25mtpa. The majority of coal is delivered to Carrington by rail through two receival facilities, with some coal
delivered by road. There are two berthsstationed at the terminal, where vessels are loaded using two shiploaders. Originally managed by BHP Billiton, Kooragang Coal Terminal began operating on Kooragang Island in 1984 with an initial shiploading capacity of 15mtpa. After purchasing the facility in 1990, PWCS invested heavily to expand capacity to 108mtpa.
Coal received at Kooragang is delivered by rail into three rail facilities, and buffer bins are used to divert the coal during hatch changes and other short-term interruptions while loading. This permits operation of the rail-mounted shiploaders at a peak rate of up to 10,500t per hour for each shiploader.
The final stage of coal loading expansions at the Kooragang Island terminal was approved in April 2011, with PWCS committing a total of $227.4 million to the Project 145 expansion. Construction has involved the installation of a fourth rail dump station, the extension of two stockpile areas to provide more than 500,000t of extra coal, additional track infrastructure, and upgrades to existing bucket-wheel reclaimer machines and shiploadingfacilities. The project, which will also involve dredging work to provide a navigation channel for a fourth berth, is the final stage of expansion before PWCS launches the T4 Project. Hunter Valley and the LTCF The Hunter Valley Coal Chain is the largest coal export operation in the world, and consists of 35 coal mines
owned by 14 coal producers. The chain includes the movement of coal trains across distances in excess of 380km to reach the Newcastle Port, where more than 1100 coal export vessels are loaded
at PWCS terminals every year.
At the end of 2009, the Hunter Valley Coal Industry signed a long-term commercial framework (LTCF) with the NSW Government to ensure continual supply of Hunter Valley coal to international destinations. Japan is PWCS’s biggest export market, with 64.48 per cent of the coal that went through PWCS terminals exported there in March. Other major export markets include South Korea, China and Taiwan, which imported a combined total of 31.35 per cent in March.
Under the LTCF, PWCS is obliged to expand its operations to ensure there is timely and sufficient terminal capacity to meet the long-term export demands of the Hunter Valley coal producers. The LTCF’s primary function is to address capacity problems that have delayed the Hunter Valley Coal Chain in recent years and enable timely infrastructure investment decisions to be made,underpinned by 10-year ship-or-pay contracts.
According to PWCS, contracted allocations with producers will total 147.6mt in 2015, and there are a number of companies with projects at various stages of development that have indicated the need for future terminal access.
PWCS chief executive officer Hennie Du Plooy said the company’s coal loading capacity of 133mt was currently ahead of the overall coal chain capacity and that construction would be completed “in a staged manner to ensure progression matched coal export demand”. “In the calendar year of 2011, we loaded 98 million tonnes [of coal] because that’s essentially what the rest of the coal chain delivered to us,” he said.
“To address this mismatch, PWCS and other coal chain participants are working on a contractual alignment initiative to ensure that producers have the contractual means – primarily with rail providers – to ensure that PWCS receivals are better aligned with PWCS capacity.
“This is intended to ensure that rail track development and rolling stock availability keeps up with loader development at the port.”
The proposed extension of the coal terminal on Kooragang Island [the T4 Project], is a critical part of the LTCF: intended to ensure that coal infrastructure investments and exports from Newcastle occur more efficiently. “Under this plan, T4 gives coal producers certainty and peace of mindthat there will be capacity for them at the port,” Mr Du Plooy said.
“Producers can secure that capacity by locking into long-term contacts with PWCS – another important part of the long-term coal export plan.” Mr Du Plooy said that despite PWCS not yet having received planning approvals, many producers had “already started locking into contracts to use T4”. “When such certainty is available, all coal chain participants are better able to make investment decisions,” he said. “Indeed, there has been unprecedented investment along the coal chain in the wake of the LTCF coming into effect and PWCS announcing the progression towards T4.
“There has been investment and expansion activity from mines up in the valley right down to tug boats at the port.
“The Australian Competition and Consumer Commission, which authorised the Hunter’s coal export plan, have clearly acknowledged this activity.”
The T4 Project will be developed on about 200ha of industrial-zoned land on Kooragang Island, to the west of existing PWCS operations. It will involve the construction of additional rail, a rail dump station, a stacker, coal stockpile pads and reclaimer infrastructure, and will also require the delivery of four vessel berths on the northern and southern sides of the Hunter River.
Through the NSW State Government, a number of specialist studies have been completed to determine the impact of the construction and operation of the T4 Project. Investigations so far have
indicated a number of environmental and community concerns.
Due to the sensitive location of the terminal on the Hunter River, queries have been raised regarding potential impacts on flora and fauna in the region. Mr Du Plooy said the Environment
Protection and Biodiversity Conservation Act had been triggered because of frog, bird and wetland issues on and around the T4 site, and added that PWCS was currently waiting on advice from the Commonwealth Government.
“But we are very confident that we can manage all such environmental issues by providing, for example, outstanding environmental offset and compensatory strategies,” he said.
Community concerns have also been raised about the amount of coal dust that will be produced from the proposed terminal and blown into surrounding residential areas. In response, PWCS has promised to
spend millions of dollars on limiting coal dust through the use of automatic stockpile sprays and additional dust control measures – providing the project gets the go-ahead.
“This will include utilising advanced water spray systems and on-site dust monitors to ensure dust liftoff is kept to a minimum,” Mr Du Plooy said. “We have also committed to enhancing dust mitigation strategies at our existing operations. “This is in direct response to community feedback: the community is telling us they want us to do more to better manage dust and we’re doing just that.”
Worries have also being voiced regarding the impact that the dredging required for the development of T4 will have. However, existing consents for dredging in the South Arm of the Hunter River are held by Roads and Maritime Services, and, consistent with previous projects, PWCS will seek to operate under these consents. Despite significant feasibility and environmental advancements, Mr Du Plooy said it was now a waiting game.
Late last year, PWCS lodged an environmental assessment with theNSW Department of Planning that determined the potential impacts of the project and the measures required to protect the environment and ensure the well-being of the local community. It went on public display last month, and PWCS is currently awaiting comment from stakeholders in industry, government and community circles.
“If all goes to plan we would be hopeful of obtaining approvals or T4 next year, enabling us to commence staged construction almost immediately”, Mr Du Plooy said.
“However, we cannot pre-empt the approvals process or guess matters such as consents and conditions. “We are in the hands of a rigorous and objective planning process, and must see this through.”
Future Mr Du Plooy said 2011 was a significant year for the company, which in addition to the advancement of Project 145 saw the finalisation of the $670 million Master Plan Completion project.
One of the biggest expansion phases in the history of PWCS, it enabled the loading capacity increase to 133mtpa. This year is also set to be a milestone for PWCS. Mr Du Plooy said a top priority was working with the NSW and Commonwealth Governments to ensure that the T4 planning approvals process ran as smoothly as possible. “Given the demand to export more coal from Newcastle and the fact that producers are entering into contracts to use T4, we’re making it abundantly clear that there can be no planning process delays,” he said.“Our bigger-picture objective is continuing to service the coal industry and ensuring loading operations are as reliable and efficient as possible.”
By Helena Bogle