The Queensland state government approved a A$9 billion ($9.24 billion) expansion of the Abbot Point coal export port to increase capacity to meet demand from producers in Australia, the world’s biggest exporting nation.
The number of planned terminals will rise from three to nine, two more than under the earlier A$6.2 billion plan, Premier Anna Bligh and her deputy Andrew Fraser said today in statement. The government boosted the scope of an initial expansion plan following “overwhelming demand,” they said.
Electricity demand in Asia, excluding Japan, will rise three-fold by 2025, with thermal coal remaining the main fuel source for generation, according to Royal Bank of Scotland Plc. Export capacity at Abbot Point will rise to 385 million metric tons in 2017, the statement said, from a current 50 million tons.
“This expansion indicates there are massive demand expectations for coal,” Peter Arden, senior research analyst at Ord Minnett Ltd. in Melbourne, said by phone. “This is going to unlock a lot of thermal coal development.”
Anglo American Ltd. (AAL), Rio Tinto Group (RIO) and Vale SA (VALE3) are among companies given the right to negotiate for the building of future terminals, North Queensland Bulk Ports Corp., manager of Abbot Point, said in a e-mailed statement. China-backed Macmines AustAsia Pty, a group which comprises Peabody Energy Corp. (BTU), New Hope Corp. and Carabella Resources Ltd. (CLR), as well as Waratah Coal Pty, owned by Australian billionaire Clive Palmer were also named.
Abbot Point, located 25 kilometers (16 miles) north of the town of Bowen, has been nominated as the potential loading point for companies planning about $32 billion of thermal coal projects in the Galilee Basin.
Vale, India’s GVK Power & Infrastructure Ltd. and Adani Enterprises Ltd., India’s biggest coal importer, are among companies looking to develop mines there to meet rising demand for the fuel in Asia. The terminal also serves as a loader for coal produced in Queensland’s Bowen Basin, the world’s biggest source of steelmaking coal.
Australia’s coal export terminals are struggling to meet demand from Asia with ships queuing offshore New South Wales state waiting to load. Port Waratah Coal Services Ltd., which operates two export terminals in Newcastle, the world’s biggest for thermal coal, last week said it has asked all 14 producers that use the port to cut shipments by a combined 750,000 metric tons until the end of this year to reduce congestion.
The existing terminal at Abbot Point is being expanded to 50 million metric tons capacity from 21 million tons, according to its website. BHP Billiton Ltd. (BHP), Hancock Prospecting Pty and GVK were selected to develop two more terminals in a previous expansion plan.
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