Queensland’s state government has delayed a A$12 billion ($11 billion) expansion of the Hay Point port, the world’s biggest export harbor for steelmaking coal, citing slowing demand for the commodity.
Development of Dudgeon Point, which will add as much as 180 million tons of export capacity to the harbor, will start in late 2015 rather than 2014, according to an e-mailed statement from North Queensland Bulk Ports Corp. Adani Enterprises Ltd. is part of a group that won “preferred proponent” status in 2010 for the construction of the two terminals.
The outlook is “grim” for the mining sector, particularly thermal coal, Anglo American Plc Chief Executive Officer Mark Cutifani said today. The company is among producers cutting workers and scaling back development projects to cope with escalating costs and falling prices. Glencore Xstrata Plc halted work on the Balaclava Island export port in May, citing poor market conditions and excess capacity in Queensland.
The construction of Dudgeon Point has been affected by slowing global coal demand during the past year, North Queensland Bulk Ports said. The development of the export terminals will be funded by the industry, the port authority said on its website.
Power coal at the Australian port of Newcastle, Asia’s benchmark price, has dropped 10 percent this year to $81.20 a metric ton, extending a 19 percent slump in 2012, the worst since 2005, according to IHS McCloskey data. Prices for the steelmaking variety have slipped 15 percent.