Coates said "irrational exuberance" around coal prices and demand could see a $A3 billion over-investment in planned infrastructure in Queensland alone. Australian infrastructure owners of port and rail could potentially spend $A4.8 billion in efforts to increase coal export capacity by 150 million tonnes by 2010.

Owner of the Dalrymple Bay Coal Terminal, Babcock & Brown Infrastructure, is planning a $A1.1 billion expansion, to lift capacity from 55Mtpa to 85Mtpa. BBI operations general manager Greg Smith does not believe the expansion plans are overly optimistic in relation to future export growth, saying demand will remain sustainable.

BHP Billiton Mitsubishi Alliance (BMA) announced plans to expand its Hay Point terminal in Queensland to 44Mtpa by the first quarter of 2007, while an assessment study for going as high as 57Mtpa is underway.

The Queensland Government has begun an expansion of the Gladstone coal port facilities from 45Mtpa to 54Mtpa and is conducting a feasibility study into the construction of a railway to connect the Goonyella and Newlands rail systems. This northern ‘missing link’ would span 65km between North Goonyella and Newlands mine and may result in an expansion at Abbot Point.

The port authority is also looking into a potential new 60Mtpa coal port at Wiggins Island to service new steaming coal mine projects such as Wandoan, Monto, West Rolleston.

The Port Waratah Coal Services terminal at Newcastle is being expanded from 89Mtpa to 102Mtpa by the December 2007 quarter. Plans to lift this further to 120Mtpa are under investigation.

"Estimates of future requirements must be driven by demand-driven market forecasts, and not supply-driven ideals," Coates warned.

The Australian Bureau of Agricultural & Resource Economics (ABARE) estimates coking coal exports will increase from $A6.5 billion in 2003-04 to over $A18 billion for the year ended June 2006, while thermal coal is predicted to rise from $A4.4 billion to $A7.5 billion.

Speaking at the same conference, John Pegler, chief executive of Ensham Resources and Queensland Resources Council president, underlined the importance of properly sequencing appropriate developments in each corridor and “making sure that appropriately timed, ongoing investment triggers are in place”

"Timely investments in additional track capacity, rolling stock and port capacity across central Queensland are not only welcome but also essential if Queensland is to capitalise fully on the economic growth across Asia," he said.

Taken in their totality, the current infrastructure expansion under investigation across Australia certainly do appear to be extravagant, but industry observers believe it unlikely all of them will go ahead. For one, ports will not commit to major expansions without take or pay commitments from coal suppliers.

One coal analyst predicts hard coking coal prices will fall to levels of around $US110 per tonne next year, from current levels of $US125/t, while steaming coal is predicted to drop to around $US46/t from current levels of $US52/t. Other metallurgical coals are predicted to drop by a higher portion.

If this price softening occurs it will probably result in a cooling of the current ardor around expansion.