Newcastle coal vessel system dependent on capacity progress: ACCC

<p>Port Waratah Coal Services (PWCS) has won authorisation to continue its vessel nomination system until the end of 2007, the Australian Competition and Consumer Commission (ACCC) said.</p> <p>It is expected to save coal producers between $US106m and $US179m in demurrage costs that would accrue if the vessel queue was allowed to re-form off the port of Newcastle to the 50-bulkship levels of early 2004.</p> <p>The authorisation for a medium-term system replaces the short term-system that expired in December 2004 and is designed allow the Hunter Valley’s coal network infrastructure capacity to catch up with demand for its coal, ACCC said.</p> <p>"The system essentially reduces the amount of coal each producer can export through the port on a pro rata basis so that the overall amount handled by the port better matches the amount that can be delivered by the coal chain," ACCC chairman Graeme Samuel said.</p> <p>"The ACCC is satisfied that under the system the total volume of coal exports from the Hunter Valley is unlikely to be reduced, particularly given the additional flexibility measures introduced under the new scheme."</p> <p>A built-in "trigger mechanism" will ensure that the system will not operate unless expected demand exceeds capacity by "at least 3m tonnes", the ACCC said.</p> <p>Mr Samuel said the capacity of the Hunter Valley coal chain was expected to increase from 86m tonnes a year to 120m tonnes "in the next few years" under a long-term program of coordinated investment.</p> <p>"Under the condition of the authorisation, PWCS will be required to report annually to the ACCC on the progress made in the Hunter Valley against the coordinated program of investment and the extent to which the use of capacity is being maximised," he said.</p> <br />