Construction of the third coal loading terminal at Newcastle’s port is set to finish in the first quarter of 2010, as planned, but Felix hinted there were dredging setbacks in its recent quarterly report.

“Over 5 million cubic metres of mainly river sand has been dredged, most of which has been used as stockpile base fill,” Felix said.

“Dredging of contaminated material adjacent to the old steelworks site is behind schedule and is unlikely to be completed in time for the first shipment in March 2010.”

On the issue, industry sources told the Australian Financial Review newspaper that the terminal’s 33 million tonne annual capacity target by the end of next year could be delayed by 12 months.

BHP Billiton has reportedly not received all approvals required to start significant dredging work, triggered by the contamination from the steelworks, which will impede capesize vessels from accessing the terminal.

A possible remedy is for the member coal companies of NCIG to create a channel to allow access for the smaller panamax vessels, with one source telling the newspaper if this best-case scenario cannot be achieved then there is probably a six-month delay before the loading facility can be used.

Delays to the terminal could place the recent access plan to the port in jeopardy, which was recently agreed to by port operators NCIG and Port Waratah Coal Services on behalf of the 14 Hunter Valley producers.

NCIG’s member companies include BHP, Centennial Coal, Donaldson Coal, Peabody Energy, Felix and Whitehaven Coal.

Felix reported the terminal construction was around 50% complete, with the ship loader due to arrive in June.