By Sam Collyer
The agreement that BHP has so far chosen not to sign has the potential to unlock some serious investment in what can only be seen as heavy-duty expansion of the port of Newcastle.
It does so by giving all of the coal exporters with ownership of the port terminal infrastructure incentive to invest.
About the only people with cause to celebrate the failure of the historic agreement this week are green groups.
And even they will soon discover that a doubling of ships off the coast of Newcastle is still very environmentally-unfriendly.
The question many are asking is: how did it come so far only to appear to fall at the last hurdle?
No one is in any doubt about how difficult it proved to assemble 14 Hunter coal producers in one room and get them talking.
The major coal producers aren’t accustomed to having to scratch each others backs, but that’s what they spent the last 21 months doing, all in the hope that their common itch – the debilitating congestion in the coal chain – would be relieved.
There were many setbacks to this agreement and many deadlines missed because some of the parties took objection to the many finer points in what is a very complex plan.
Even joint owners of the two terminal operators were at loggerheads at various stages because it was clear to all how important the agreement was for all of the producers and their long-term export aspirations.
The Australian Competition and Consumer Commission (ACCC) has watched the failings of the Hunter coal chain for years and has repeatedly issued thinly-veiled threats about the need for the parties to work on long-term arrangements.
The ACCC argues the coal chain parties had enough warning. They did.
It has taken just one coal producer – albeit a big one – to stop everyone else getting what they spent 21 months or more negotiating.
Suffice to say the other 13 coal producers in the Hunter are none too pleased about the sudden about-face, especially as it seems BHP already has form for experiencing last-minute heebie jeebies ahead of an ACCC deadline.
ACCC chairman Graeme Samuel will have been working the phone in an effort to avoid the current scenario, which has left the Hunter coal chain without ballast in rough conditions.
The coal chain members have been left in a state of shock that the agreement broke down so easily on the basis of changes that BHP has refused to detail.
It has made the path forward uncertain.
New South Wales Ports Minister Joe Tripodi could conceivably pull out his newly-acquired legislative weaponry, but such an option just sees the stand-off get unnecessarily nasty when a bit of common-sense might suffice.
The coal chain needs a long-term plan that guarantees infrastructure expansion and allows new entrants to the market without unreasonable restraints on the major players and their dreams of rapid expansion of their export volumes.
All had agreed that the deal brokered, which needed only a rubber stamp by Monday, ticked all the right boxes, even if the process was painful.
There are many fingers crossed that BHP will change its mind and back the plan after all.
Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au
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