Coal terminal says residents won't notice the difference if it gets approval to lift exports by 20 per cent

Documents outlining the Coal Export Terminal Optimisation project will be made public today by the approval agency, the NSW Department of Planning, Industry and Environment.

Despite the substantial 20 per cent increase in nameplate capacity the approval would bring, NCIG says it has improved the efficiency of various parts of its operation and that the new legal limit would simply bring the terminal into line with its existing potential.

"There will be no new infrastructure required as part of the modification, and no changes to NCIG's already approved environmental limits," NCIG's chief executive, Aaron Johansen, said yesterday.

"Completed environmental assessments also confirm no impact on residential properties as a result of the proposed increase in terminal capacity."

NCIG says planning for the project began last year - well before the coronavirus crisis that has enveloped the coal industry along with the rest of the world's economy.

Coal prices have fallen around the world in recent weeks as the economic impacts of COVID-19 restrictions became clearer.

But until the end of March, at least, volumes of coal out of NCIG and Port Waratah Coal Service's Carrington and Kooragang loaders were in line with, or greater than, the same time last year.

While NCIG and PWCS both play down any link, the extra tonnage sought by NCIG would cover the 25 million tonnes in capacity that would be lost if PWCS's Carrington Coal Terminal was to close. PWCS's lease with the privatised Port of Newcastle on the Carrington site expires in 2024.

The Carrington terminal's proximity to residential areas and the impact of its coal trains through suburban Newcastle have made it a target for environmental and residents' lobby groups over the years.

But PWCS chief executive Hennie du Plooy said yesterday that "we expect we will require access to Carrington terminal beyond 2024 to meet our obligations to our customers, as we have previously publicly stated".

"In order to secure this we continue to invested extensively in the terminal and are actively negotiating with Port of Newcastle to secure the lease arrangements," Mr du Plooy said.

NCIG began operations in 2010 with BHP as its main investor at a time when the established PWCS was managed by major rival Rio Tinto.

Subsequent mine purchases have given the Chinese-backed Yancoal substantial shareholdings in both loaders.

Its 2017 purchase of Rio Tinto subsidiary Coal & Allied gave it a 36.5 per cent stake, as well as management rights, at PWCS.

Yancoal has 27 per cent of NCIG, compared with BHP's 28 per cent, down from 35.5 per cent when NCIG was formed.

If Yancoal buys BHP's Mount Arthur mine as widely tipped, it could control both loader companies.

In applying to increase its legal limit from 66 million tonnes a year to 79 million tonnes, NCIG identifies more than 15 projects that its chief executive, Mr Johansen, says have lifted its capacity to the new level.

"This is not about more train or ship movements through Newcastle, the port has enough total capacity now to meet expected demand," Mr Johanson said.

"NCIG is simply seeking to provide flexibility for our customers to make better use of the unique service offering we provide."

Despite NCIG's optimism, critics are lining up - as they have in previous downturns - to predict the demise of the coal industry.

Institute for Energy Economics and Financial Analysis director Tim Buckley said yesterday that governments and financial institutions were "accelerating" their moves away from coal.

Mr Buckley said ever-cheaper renewable energy and the coronavirus economic lockdown meant outlook for "coal-fired power plants has never looked worse".

The global economic shutdown is cutting steel demand while across-the-board industry closures have slashed electricity demand.

Newcastle exported about 160 million tonnes of coal last year: about 85 per cent was thermal coal for power stations, the rest coking coal for steelmaking.

About half of our coal goes to Japan, followed by Taiwan, China and South Korea.

Last week's Australian Coal Report priced top quality Newcastle thermal coal at $US62.14 ($98.45) against an April 2019 price of $US83.00 ($117 at the exchange rates at that time).

BHP said yesterday that coking coal prices were down by 8 per cent and production 18 per cent for the year to March 31.

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