Ferguson lashes all involved in Hunter coal bottleneck

Shadow transport minister Martin Ferguson has taken the federal and state governments to task today (Thursday, May 3) after Coal &#38 Allied’s decisioin to cut production cutbacks and sack 250 contractors. Taking a swipe at the Darwin-Alice Springs railway, Mr Ferguson said the move should set alarm bells ringing about &#8220the dire state of Australia’s export supply chains&#8221. &#8220The collective failure of Commonwealth and state governments, and the private sector, to plan and invest adequately in expanding and upgrading the nation’s infrastructure is hampering growth in mineral export volumes despite the highest mineral prices in more than half a century,&#8221 he said. &#8220John Howard’s legacy will be Australia’s greatest white elephant &#8211 a barely used, $1bn railway from Alice Springs to Darwin that cannot pay its way.&#8221 But the primary focus of Mr Ferguson’s attack was the Hunter Valley. &#8220When it comes to the Hunter coal chain, there are still lots of questions to be answered,&#8221 he said. &#8220What are the port of Newcastle, Port Waratah Coal, the ARTC and the coal companies doing to add capacity and review the access regime as a matter of urgency? &#8220Where is the leadership from the State and Commonwealth governments to get this under way? &#8220Why do we have an access regime that provides access to all-comers despite the obvious fact that there is no spare export capacity? &#8220And why, with no spare capacity, have we seen new and expanded coal mines over the last year?&#8221 &#8220This is competition policy gone mad.&#8221 Rio Tinto subsidiary Coal &#38 Allied yesterday ( Lloyd’s List DCN News Wire) blamed reduced port and rail allocations for its decision to cut production to about 20% of what had been originally projected. The Australian Rail Track Corporation (ARTC) said this afternoon that the reduction in the annual rate of export coal from 106m tonnes to 90-86m tonnes for 2007 quoted in the Australian Financial Review today was unrelated to rail infrastructure capacity. &#8220The quote yesterday from a mining company spokesman which said, `We have got a rail network which cannot cope whatsoever with the growing demand for capacity’, is not correct,&#8221 ARTC chief executive David Marchant said in a statement. &#8220The rail infrastructure is not the driver of the reduction in export coal from Newcastle. &#8220The rail infrastructure has, at this time, sufficient pathing capability to carry in excess of 120m tonnes between Whittingham and Port Waratah, after allowing for maintenance of the railway line and other traffics. &#8220Between January and March of this year, of the 6,860 paths made available by ARTC, 1870 remained unutilised. &#8220ARTC remains committed to working with all producers, and as part of the Hunter Valley Coal Chain Logistics Team, to ensure rail track capacity remains ahead of demand. &#8220ARTC is investing $389m over the next few years to further enhance the capacity of the network to deal with future growth of export commitments. &#8220The coal industry is underwriting these investments and can seek works to be brought forward.&#8221 The 68 km stretch between Whittingham and the port is the major artery. Coal &#38 Allied managing director Douglas Ritchie said Coal &#38 Allied was working with other parties involved in the coal logistics chain to develop a long-term strategy to provide a more stable basis on which industry could operate. The Australian Financial Review quoted Xstrata spokesman James Rickards as blaming &#8220a rail network which cannot cope whatsoever with growing demand for capacity.&#8221

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