While China’s unofficial ban on Australian coal continues amid trade tensions, overall export figures from the world’s largest coal port have remained resilient.
Late last year when coal ships stopped departing the Port of Newcastle for China, which normally accounts for 20% of exports from the port, it sent shockwaves through the mining industry.
During the 2020 September quarter, China’s total metallurgical coal imports plummeted by 14%, while thermal coal imports nosedived 38%, compared to the same period in 2019, according to the Australian Government’s Department of Industry.
However, there is a light at the end of the tunnel, with producers finding new markets, as several other countries in Asia step in to fill the void in demand left by the superpower.
Monthly trade figures show 14.92mt of coal was exported from the port in December 2020, which was only a 3.4% drop from the 15.44mt exported in December 2019.
The value of coal exports from the port in 2020 was a whopping $18.6b.
A port spokesman said the global market for coal, as with any commodity, is constantly changing.
“For instance, Port of Newcastle has recently observed increased volumes of coal being exported to destinations such as India, Japan, Singapore and Taiwan,” he said.
“Overall port trade remains resilient.
“The port has been operating for more than 220 years and has been key gateway for many commodities in that time.”
In the past 10 years, coal exports from the Port have doubled, increasing from 80mtpa to 160mtpa, underpinned by increased demand from South East Asia.
The Port’s Masterplan 2040 describes the Port as the global gateway for the Hunter Region and NSW, the largest port on the East Coast, and Australia’s third largest port by trade volume.
“It is well-placed to support the predicted doubling of Australian freight over the next 20 years and beyond,” the report said.
“The Port, through coal export trade, will continue to provide a stable foundation for our region and state’s economy, and our business.”
But while the Plan recognises coal exports “provide a stable foundation” for the economy’s growth, it states the Port will be driven by the need to grow and diversify its trade base to meet the demands of its customers.
“Port of Newcastle takes a long-term approach to identifying and pursuing development and trade opportunities,” the spokesman said.
“We recognise the importance of continued strength in the major bulk trades including coal, fuel, fertiliser, wheat and mineral concentrates.
“It is also an exciting time for non-bulk trades.”
The Hunter Valley is home to the world’s largest and most complex coal chain and there has been significant collaboration over the past 15 years to improve the chain’s efficiency and reliability.
“Supply chain participants have made long-term investments in the infrastructure needed to ensure demand is met,” the spokeman said.
“There is ample channel, rail, road and land capacity to accommodate existing and new trade through the Port.”
With trade worth about $26b to the national economy from 4400 ship movements each year, the Port enables Australian businesses to successfully compete in international markets.
With a deepwater shipping channel operating at 50% of its capacity, significant port land available and enviable access to national rail and road infrastructure, the Port is positioned to further underpin the future prosperity of NSW and Australia.
One of the terminal operators on Kooragang Island, the port’s primary coal precinct, announced in September it had received approval to increase throughput from 66mt to 79mt a year.
Newcastle Coal Infrastructure Group (NCIG) made the application in April 2020 to accommodate increased demand if needed in the future.
CEO Aaron Johansen said the company looked forward to now offering shareholders more flexibility with the transportation and stockpiling of their products.
“This is a great outcome for NCIG, further strengthening our commitment to our stakeholders and the Hunter region,’’ he said.
‘’It also demonstrates confidence in the coal industry and the importance the sector has to the regional and State economy, now and into the future.’’
The assets managed by NSW Ports, which include the Ports of Kembla and Botany, contribute $4.4b annually to the NSW economy while supporting 30,000 jobs.
Port Kembla
Located 90km south of Sydney, Port Kembla serves the needs of regional industries including coal and steel.
It is the largest car import terminal in Australia and home to NSW’s largest grain export terminal and second largest coal export port.
While COVID-19 was behind a 6% reduction in mainly car and truck carrier vessel visits between 2018-19 and 2019-20, coal exports were on target, according to the Port Authority of NSW’s latest financial report.
Port Botany
As the largest container port in NSW and Australia’s largest common user bulk liquids facility, Port Botany imports goods to support NSW businesses and to export goods to international customers.
Container vessel visits and construction material imports dropped between 2018- 19 and 2019-20 due to the pandemic and consortia changes.
The $1 billion expansion of Port Botany in 2011 to meet an increase in container traffi was one of the largest port infrastructure projects ever undertaken in Australia.
The main construction contract was awarded to the Baulderstone Hornibrook/ Jan De Nul (BHJDN) consortium.
Menard Oceania was subcontracted to carry out the ground compaction works for all the fill material dredged from Botany Bay as part of the expansion of the existing port, through the reclamation of 60ha of land.
The expansion provided significant additional capacity to meet projected long term trade growth.
Driving Economic Recovery
NSW Ports CEO Marika Calfas said the pandemic had led to greater public awareness of the critical nature of ports to keep the economy afloat.
“Through drought and bushfires, a global pandemic, industrial disruption and supply chain congestion, Port Botany and Port Kembla have continued to service the trade needs of NSW and keep the economy moving,” she said.
“During the year, volumes across most trades have remained relatively stable and we are now seeing the first exports of grain after an extended period of drought across NSW.”
Ms Calfas sad as population and trade volume grows, there would be investment in berth upgrades, a container park, storage tanks and increased rail capacity.
“Port Kembla has exciting growth opportunities ahead,” she said.
“In addition to being the site for NSW’s next container terminal once Port Botany nears capacity, we have signed a long-term lease with Australian Industrial Energy to construct and operate Australia’s first LNG import terminal.
“This initiative will address future energy needs in NSW and other states.”
The Port Kembla Gas Terminal will deliver a new source of natural gas to the market to meet predicted supply shortfalls and could supply more than 75% of NSW’s gas needs.