Port Waratah Seeks Approval for New Coal Harbor Access System

By Angela Macdonald-Smith

Nov. 20 (Bloomberg) -- Port Waratah Coal Services, operator of the two coal-export terminals at Australia's Newcastle, lodged an application with the national competition regulator seeking approval for a new system to manage access to the port.

The application, made jointly with the Newcastle Coal Infrastructure Group, is necessary ``to provide certainty for producers in 2009 and avoid long ship queues and crippling demurrage costs'' likely to arise once the existing quota system expires Dec. 31, Port Waratah said in an e-mailed statement.

Bottlenecks at Australian ports have helped constrain supplies of the fuel to Asian customers, contributing to record prices earlier this year and increasing costs for mining companies. Newcastle, the world's biggest coal-export harbor, has operated an export quota system since March 2004 as it seeks to reduce waiting times for ships. The systems require approval by the Australian Competition and Consumer Commission, or ACCC.

``The intention is for the short-term arrangement to be a stepping stone to a long-term'' model for allocating port capacity underpinned by contracts, Graham Davidson, general manager of Port Waratah, said in the statement released late yesterday. The application to the regulator assumes a permanent solution is agreed by mid-2009, he said.

Xstrata Plc, Rio Tinto Group and BHP Billiton Ltd. are among mining companies that ship coal through Newcastle.

Newcastle Port is expected to export about 91.5 million metric tons of coal this year, up 8 percent on last year, Port Waratah said. That compares with export capacity of 102 million tons at the two terminals, which is due to reach 113 million tons next year through a A$500 million ($319 million) expansion.

Newcastle Coal Infrastructure Group, which is building a new coal-export terminal at the New South Wales port, is owned by BHP Billiton, Centennial Coal Co., Donaldson Coal and other mining companies.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net