The implementation memorandum agreement was agreed to by all 14 Hunter Valley producers through terminal operators Port Waratah Coal Services and Newcastle Coal Infrastructure Group three weeks ago, meeting an extended deadline imposed by the Australian Competition & Consumer Commission.
Revealed at Asciano’s investor briefing today, coal division general manager David Irwin said the agreement provided the mechanism for the staged expansion of coal export facilities in Newcastle to beyond 200 million tonnes per annum capacity.
He added it would allow both PWCS and NCIG to contract on a long-term “ship or pay” basis.
“This is the impetus for the creation of supply chain capacity ‘certainty’ for coal exporters and service providers,” he said in a presentation.
“Coal exporters will be looking to align their ‘ship or pay’ contracted port entitlements with above and below rail contracts, removing the issues created by the existing port-based allocation/compression system on above rail contracts.”
Asciano said Hunter Valley’s coal exports were forecast to double from the current 95Mtpa capability to around 195Mtpa.
With its Queensland coal operations, Asciano has forecast the 2011 financial year will see 232Mt of coal exports through the state’s ports.
Irwin said Asciano subsidiary Pacific National had 86% of the Hunter Valley’s market for coal freight.
The Hunter Valley producers that are part of the implementation memorandum are BHP Billiton’s Hunter Valley Energy Coal, Coal & Allied, Xstrata Coal, Anglo Coal Australia, Integra Coal (Vale Australia), Peabody Pacific, Centennial Coal, Austar (Yancoal Australia), Felix Resources, Gloucester Coal, Whitehaven Coal, Donaldson Coal, Bloomfield and Idemitsu.
Asciano had a net debt of $A4.59 billion ($US3.26 billion) at the end of last year and hopes to cut its debt by $1 billion through asset sales.
The company has previously announced some proposals received would result in a change of control or a recapitalisation of the group.