Abbot Point in Queensland Seeks to Be World's Biggest Coal Export Harbor

Australia’s Abbot Point plans to increase its export capacity 11-fold, transforming the port into the world’s biggest coal harbor as demand for the commodity from Asia rises.

North Queensland Bulk Ports Corp., manager of Abbot Point, intends to seek expressions of interest toward the end of 2010 to develop additional terminals and expand export capacity to about 230 million metric tons of coal a year, Chief Executive Officer Brad Fish said in an interview. The harbor is being enlarged to 50 million tons in 2011 from 21 million tons now.

Chinese and Indian demand is underpinning a strong market outlook for steelmaking and power station coal, UBS AG said in a June 22 note. BHP Billiton Ltd., the world’s largest mining company, and Hancock Coal Pty in April won preferred status to develop two additional terminals at Abbot Point that will take export capacity to 110 million metric tons.

“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,” Fish said from Brisbane today. “That would make it, by a country mile, the largest coal port in the world.”

Abbot Point, 25 kilometers (16 miles) north of the town of Bowen, has one terminal with an export capacity of 21 million tons a year, Fish said. The port shipped 14.4 million tons and handled 176 vessels in the 12 months ended June 30, 2009, according to the North Queensland Bulk Ports Corp website.

Bowen is about 1,100 kilometers north of Brisbane, the Queensland state capital.

Biggest Ports

Newcastle port in Australia’s New South Wales state is the world’s biggest export harbor for coal. It has a capacity of 113 million tons and is being increased to 163 million tons by the end of 2011 through the development of a new terminal and expansion at an existing facility.

Port Waratah Coal Services, operator of two of the three terminals at Newcastle, said June 4 it received planning approval from the state government to develop additional infrastructure, including a fourth vessel loader, that will help increase the harbor’s total export capacity to 175 million tons.

South Africa’s Richards Bay, Europe’s biggest source of the fuel burned for power, this year increased its capacity to 91 million tons. Dalrymple Bay in Queensland has the capacity to export 85 million tons a year. Gladstone, also in Queensland, shipped more than 58 million tons in 2009.

Rail, Port Spend

“The real advantage Abbot Point has over some other locations is that it’s the most northern coal port,” Fish said. “When you’re comparing with Hay Point, Gladstone, or Newcastle, it’s either a day or two, or up to four or five days closer to the Asian customers.”

Port and rail infrastructure in Queensland and New South Wales is being expanded at a cost of A$4.8 billion ($4.1 billion) as coal producers develop mines to tap global demand, a report last month from the Australian Bureau of Statistics shows.

Development of the A$1.1 billion Northern Missing Link in Queensland, which started last month, is targeted for completion by January 2012, the state’s Premier Anna Bligh said in April. The 69-kilometer rail line will allow producers in the Bowen Basin, including BHP Billiton Ltd. and Rio Tinto Group, to ship the commodity through Abbot Point.

The Northern Missing Link will connect the Goonyella rail system, the busiest network in Queensland, to the Newlands line. Goonyella services 22 mines operated by companies which include, Xstrata Plc, the BHP Billiton Mitsubishi Alliance and Peabody Energy Corp.

“This will open a whole new transport corridor for coal companies, giving them a huge increase in export capacity for their existing mines and for future mining developments in the region,” Bligh said April 8.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

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