'Historic' agreement sures up Hunter Valley coal chain

"Historic" agreement reached in long-running Hunter Valley coal chain dispute, providing certainty on contracts

Coal supply chain partners in the Hunter Valley have struck a long-awaited agreement to sure up coal producing contracts and reduce loading queues.

A "comprehensive industry agreement" has been signed and lodged with the Australian Competition and Consumer Commission (ACCC), which is expected to decide on the application by the end of July.

The document is the culmination of 18 months of negotiations between Hunter Valley coal industry operators and the New South Wales Government through the Newcastle Port Corporation.

The agreement allows terminal operators to enter long-term contracts with coal producing customers, which they say provides operational and investment certainty.

A ‘common user’ clause that means terminals are forced to service any vessel at any time has been suspended, enabling operators to lock into decade-long contracts.

Terminal operator Port Waratah Coal Services (PWCS) will be allowed to build a new coal loading berth on Kooragang Island to meet future infrastructure needs.

The arrangements will replace the capacity balancing system, which has been used to reduce the queue of coal ships but has been criticised for failing to provide certainty for investment.

With the current vessel queue management scheme expiring today, the industry application asks for the new framework to be applied retrospectively from July 1 to ease the backlog of queuing vessels.

PWCS says it is now sorting out contractual alignment arrangements with customers that could come into effect progressively if the industry agreement is authorised by the ACCC.

PWCS General Manager Graham Davidson calls it an "historic and very welcome development for the Hunter Valley coal industry".

"Although PWCS already has a successful long-term infrastructure expansion program in place, the new arrangements will allow us to invest in future infrastructure and boost coal throughput in a way never seen in the Hunter," he says.

Ports Minister Joe Tripodi says the agreement gives industry certainty over coal allocations beyond the end of the year.

"This proposal will secure growth in the coal industry well into the future by promoting local and international investment and competition in the Hunter," he says.

"It guarantees access for new entrants and ensures the growth of the coal terminal capacity while satisfying the concerns of existing producers."

Newcastle Port Corporation and the two terminal operators will finalise lease amendments and legal agreements by August 31 in readiness for the new system to begin operating in January next year.

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