Abbot Point Coal Terminal

Abbot Point Coal Terminal is an export coal terminal with a capacity of 25 million tonnes a year which is ultimately owned by the Ports Corporation of Queensland, a Queensland government-owned business.

The coal export terminal was operated by Abbot Point Bulk Coal Pty Ltd, a subsidiary of Xstrata Coal Queensland. However, in May 2011 the Queensland government announced that the terminal had been leased to a subsidiary of the Adani Group for 99 years.

The terminal is currently being expanded to increase the capacity by the end of 2011 for the export of 50 million tonnes a year. Further expansion plans are being canvassed to increase the coal export capacity to approximately 230 million tonnes a year. The Deputy Chief Executive of North Queensland Bulk Ports (NQBP), Jeff Stewart-Harris, told the Daily Mercury in May 2011 that the ultimate capacity of the terminal could be 350 million tonnes of coal.

North Queensland Bulk Ports Chief Executive Officer Brad Fish said in mid-2010 that "if you were to fast forward about 10 years, it's not impossible to imagine that there could be four or five coal terminals sitting at the port of Abbot Point. That would make it, by a country mile, the largest coal port in the world."

Privatisation plan morphs into 99 year lease
As part of a privatisation of government-owned assets, the Queensland Government led by Anna Bligh, in June 2009 identified the Abbot Point Coal Terminal for sale. In announcing the plan the Premier stated that the sale of the terminal and other assets would both raise cash to fill a projected budget shortfall it would also avoid the need for future state capital expenditure. The government stated that they expected the sale of the terminal and associated infrastructure "is expected to earn more than $1.9 billion" and would "constitute an attractive package to investors."

However, with mounting community and union opposition to the privatisation, the government opted to sell the lease rights for the terminal for a 99-year period. In early May 2010 Bligh announced that the lease for the "X50" terminal - an expansion designed to lift export capacity to 50 million tonnes of coal a year -- had been leased to Mundra Port Pty Ltd, an Australian subsidiary of Mundra Port and Special Economic Zone Ltd, which in turn is a subsidiary of the Adani Group, for $1.829 billion. Bligh stated that the proceeds of the lease sale would "be set aside to fund Queensland’s share of the recovery from our summer of floods and cyclones."

"This piece of infrastructure is designed purely to help coal companies make a profit. Taxpayers have done their bit to establish the terminal and entice investment, now it’s time for the private sector to take over," Bligh stated.

Terminal facilities
The terminal "comprises a rail in-loading facility, coal handling and stockpile areas, and a single trestle jetty and conveyor connected to a berth and shiploader, located 2.75km off-shore. The terminal is being expanded with the addition of a second wharf and shiploader as well as an additional onshore stockyard and machines."

The terminal exports coal from the "Newlands, Collinsville and Sonoma mines. In addition, small quantities of coal may be brought north on the coastal rail line from the Goonyella system for export," the North Queensland Bulk Ports Corporation, a subsidiary of the Ports Corporation states on its website.

Exports
When the port was first commissioned in 1984, the coal export capacity of the terminal was 15 million tonnes. This was later expanded so that by 2009 the capacity was 25 million tonnes a year. The X50 expansion, scheduled for completion in 2011, is designed to allow the terminal to export 50 million tonnes a year.

In 2009–10 the terminal loaded 224 ships with a total of 16.93 million tonnes of coal.

Purchase of 99 year lease by Adani
In April 2011, Indian company Adani Enterprises, the country’s largest coal importer, agreed to buy the 99 year lease for the Abbot Point Coal Terminal for A$1.83bn ($1.98bn). The purchase was among a number placed by Indian groups in Australia and elsewhere as the country to secure energy resources to meet rising demand for power to complete infrastructure projects in India.

Under the terms of the lease the the land, "associated strategic infrastructure such as the jetty and wharves" would remain in public hands. Under the deal North Queensland Bulk Ports Corporation, will act as "port authority for the Port of Abbot Point, responsible for the ongoing safety, security, efficiency and development of the Port."

Expansion plans for beyond 50 million tonnes a year
The Premier's media release on the Adani lease deal also stated that the government "will continue to facilitate future private sector-funded expansion of export infrastructure within the broader port precinct." The rather cryptic statement refers to plans to expand the capacity of the port beyond the x50 expansion so that it can export 100 million tonnes a year or more.

On its website the North Queensland Bulk Ports Corporation states that in addition to the X50 expansion, six additional coal export terminals are being considered, each with an approximate capacity of 30 million tonnes per annum. In late 2009 the ports corporation sought expressions of interest for the developed of Terminals 2 and 3 (previously referred to as the X80 and X110 projects. The corporation states that "the Preferred Developers, Hancock Coal Limited and BHP Billiton Limited are currently working with NQBP to enter into a Framework Agreement to progress the project and are finalising preliminary design and environmental studies."

The corporation also states that "NQBP has developed plans to facilitate the development of four additional separate tranches, each nominally 30mtpa, of coal terminal capacity." These projects are referred to as T4, T5, T6 and T7. "To assess preliminary demand for additional terminals at T4-7, in December 2010 NQBP held a customer forum to outline the proposed development and invited non-binding indicative expression of interest for terminal capacity from users. Given the high level of indicative demand, the next step proposed by NQBP is to run a formal EOI process. This EOI process is likely to commence in mid 2011, subject to all necessary State Government and Board approvals. The T4-7 EOI will be advertised in major local, national and international newspapers, and on this site," the ports corporation states.

Financing expansion
In May 2011 NQBP deputy chief executive officer Jeff Stewart-Harris said that he was hoping that the federal government would allocate $500 million from Infrastructure Australia in the budget towards the cost of establishing a "multi-cargo facility" which includes additional coal handling capacity. The facility would cater for BHP-Billiton and Hancock Coal's terminals 2 and 3 and cater for terminals 4 to 7 in the longer term. The establishment of the multi-cargo terminal would, he said, cost about $2.3billion and require the dredging of 20 million cubic metres of material and the construction of eight kilometres of rock wall. The facility would cater for 12 capesize shipping berths. The first stage of the facility, he said, would cost approximately $1 billion.

Newman government pulls back on expansion plans
In late May 2012 the Queensland Minister for State Development, Infrastructure and Planning, Jeff Seeney, announced that it was pulling back from pushing for the development of terminals 4-9 and the multi-cargo facility to concentrate on the development of the BHP-Billiton' terminal 2 and Hancock Coal's terminal 3. Announcing the decision Seeney stated that "we consider that expansion at Abbot Point should be incremental. We will proceed with T2 and T3 and will discuss with industry what additional capacity is needed as that expansion is underway,” Mr Seeney said. "The proposals outlined by the Bligh Government were unrealistic and undeliverable. They were never going to come to reality.”

Seeney sought to blame the retreat on terminals 4-9 on the federal government's environmental assessment process and the likely time it would take to get approvals for the expansions. "The significant scale, complexity and potential impacts of the proposed infrastructure are extensive and it would be many years before the whole of the planned additional capacity would realistically be warranted,” Seeney said.

Seeney's announcement followed confirmation by the Queensland Treasurer Tim Nicholls that Rio Tinto had withdrawn its bid for additional port capacity. In a media release Nicholls stated that Rio Tinto's had informed the hovernment that its withdrawal was "in part" due to environmental assessment procedures but that was the only element he emphasised in his media release. However, the Australian Financial Review reported that "Nicholls said Rio Tinto had told the government the reasons for pulling out of the expansion were rising costs, uncertain markets and the long time frames for regulatory approvals."

Related SourceWatch articles

 * Australia and coal
 * Australian Coal Association
 * Queensland and coal
 * Profiles of other coal terminals (or click on the map)

External resources

 * "Abbot Point", North Queensland Bulk Ports Corporation website
 * Anna Bligh, "Queensland seeks to secure jobs and export growth for the future", Media Release, December 1, 2011.