Further investment uncertainty for Hunter coal industry
The Hunter coal industry faces further investment uncertainty in relation to one of Australia’s most important export gateways following the announcement today of further legal action appealing against the relevant competition body’s decision regarding pricing at the Port of Newcastle.
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The Hunter coal industry faces further investment uncertainty in relation to one of Australia’s most important export gateways following the announcement today of further legal action appealing against the relevant competition body’s decision regarding pricing at the Port of Newcastle.
The Australian Competition Tribunal last month determined the appropriate price that should apply to coal ships accessing the Port of Newcastle.
The Tribunal – which comprises a Federal Court judge and experts in industry, commerce, economics, law and public administration appointed by the Governor-General – is the review body called upon to re-consider and rule on such competition matters.
The Tribunal’s decision, which ended a four year legal battle initiated by global mining giant Glencore, noted the importance of ensuring that prices be at a level that provides “an incentive to a service provider to efficiently (and in a timely fashion) invest in maintaining and improving infrastructure necessary to provide facilities at the Port”.
The Tribunal also expressed concern that “prices that are too low can lead to non-investment or delayed investment, or the non-provision of some infrastructure services”.
It follows the Australian Government’s announcement in September regarding the revocation of the declaration of service at the Port of Newcastle, which brought to an end a period of unnecessary uncertainty for all parties and enabled the port to deal directly with its users.
However, both the Australian Competition and Consumer Commission and Glencore each yesterday commenced separate but overlapping appeals in Melbourne and Sydney in the Federal Court against the competition tribunal’s decision.
Port of Newcastle CEO Craig Carmody said it was disappointing to see further uncertainty for everyone.
“Port pricing should remain subject to an appropriate and efficient commercial relationship between the port and its customers,” Mr Carmody said.
“The endless legal battles erode confidence in investing in infrastructure, be it at the mine or at the port, in one of Australia’s most important export industries.
“We will continue to sit down with our customers to discuss our services and pricing, respecting the need for all parties to return to a normal commercial relationship.”
Port of Newcastle
Port of Newcastle is a major Australian trade gateway handling 4,600 ship movements and 171 million tonnes of cargo each year. With its annual trade worth about $25 billion to the New South Wales economy, the Port enables businesses across the state 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, Port of Newcastle is positioned to further underpin the prosperity of the Hunter, NSW and Australia. As custodians of the region’s critical asset, Port of Newcastle is diversifying its trade as it strives to create a safe, sustainable and environmentally and socially responsible Port that realises its potential.