Fourth coal loader is climate vandalism

October 15, 2015

The New South Wales government's nominally independent Planning Assessment Commission (PAC) has approved a fourth coal loader for the port of Newcastle.

Port Waratah Coal Services (PWCS) initially applied to build the loader in 2012 at the height of the resources boom. Since then coal prices have crashed, caused by the fact that renewable energy is now a preferred source of “new build” power plants across the globe and fewer new coal-fired power plants are being built than was forecast.

The loader approval gives the green light to the multinational mining firms exporting — or planning to export — coal from the Hunter Valley and neighbouring areas exacerbating the oversupply currently plaguing the sector.

Lock the Gate spokesperson Nic Clyde said: “Throughout the Hunter Valley and Liverpool Plains, agricultural land, water resources, and remnant bushland have been under extreme pressure as the coal industry rapidly expands. Today's decision only adds to that pressure.”

Health impacts

The Coal Terminal Action Group (CTAG), a coalition of residents' groups and local environment organisations, conducted a doorknock in 2012 to survey residents about their concerns over the proposed new loader. Overwhelmingly, residents reported that their primary concern was about the health impacts that would come with additional coal loading capacity in the port of Newcastle.

More than 30,000 people live within 500 metres of coal rail corridors, stockpiles or loading facilities in the greater Hunter. The presence of dust pollution “from pit to port” is well known to residents and carries with it well-documented health impacts. Particulate pollution affects lung function, which in turn impacts heart function. Coal dust contains a cocktail of heavy metals and toxic substances, including cobalt, arsenic and even uranium.

Apart from campaigning to stop T4, CTAG also argued that coal carriages and stockpiles should be covered, as is best practice in other countries. A community doorknock of 1270 people living near existing loaders and rail lines in 2014 found 63% opposed T4 and 90% want coal trains covered.

T4 would allow for an additional 70 million tonnes a year, an almost 50% increase in cola exports from current levels of around 150 million tonnes a year. Fifty percent more coal means 50% more coal dust pollution.

Ecological impacts

T4 is to be built on top of one of the most significant wetlands on the east coast of Australia, which is home to the threatened green and gold bellfrog.

The extra coal slated to go through the port will come from a swathe of controversial new mines and mine expansions being forced upon unwilling and distressed communities throughout the Hunter Valley and beyond.

New pits proposed for Gloucester, Boggabri, Leard Forest, Bulga, Bylong, Muswellbrook, Denman, as well as near Mudgee and on the fertile Liverpool Plains, would all help feed T4 while trashing farmland and bushland and polluting aquifers and rivers.

PWCS have denied that T4 will be a “pull factor” that would stimulate more coalmines if built, as if the already debt-laden industry would be happy to borrow another $5 billion to build the loader but would not then try to pump coal through it to get a return on their investment.

The massive climate impacts of the further expansion of coal exports from Australia should be self-evident. T4 is climate vandalism at its most reckless.


In approving the loader, the PAC made the understatement of the year, saying the project was “unusual as there is no immediate need for the development of the terminal”.

To understand this statement in context, one must consider Newcastle's existing coal exporting capacity.

Newcastle is home to three coal loaders. Two of these are owned by PWCS, whose largest shareholders are British-Australian listed Rio Tinto and Swiss-based Glencore. A third loader, opened in 2010, is operated by Newcastle Coal Infrastructure Group, whose largest shareholder is BHP Billiton. Together, these three loaders have the capacity to load 210 million tonnes a year of coal into the queue of ships waiting on the horizon off the windswept beaches.

However, Newcastle only shipped about 150 million tonnes of coal this year, and for the two years before that. The port already has 60 million tonnes of “spare” capacity that is yet to be utilised, and exports are barely growing — if at all.
Ex-Citibank analyst Tim Buckley from the Institute for Energy Economics and Financial Analysis said: “The three largest coal import markets — China, India and Japan — are declining. Together, these three nations accounted for 51% of globally traded thermal coal in 2014.”

Given their imports of coal are declining, Buckley said: “There is absolutely no room for any new greenfield thermal coal mines in Australia. They are nothing more than stranded assets in the making.”

Nonetheless coal capital is still persisting with such greenfields projects, such as Shenhua's Watermark coalmine proposed for the Liverpool Plains.

Interestingly, the approval of T4 neatly coincides with Rio Tinto seeking to sell its Hunter Valley coal assets. These consist of a controlling stake in two massive adjacent mines, including the Mount Thorley Warkworth mine. Bulga residents have been fighting its plans to swallow up their township.

A 40% stake in a third mine, Bengalla, was sold to New Hope Coal for $606 million in September. Rio Tinto may hope that the T4 approval acts as a “deal sweetener” to its Hunter coal sell-off.

The other major stakeholder in T4 proponent PWCS is Glencore, whose share value has dropped 77% in the last year and which analysts have warned could become worthless if commodity prices do not pick up, as its debts are so great.

Despite its woes, the coal industry may try to dig itself out of the hole it is in. The willingness of coal companies to further inflate the “carbon bubble” and inflame the current global oversupply of coal should not be underestimated. Just because building T4 makes absolutely no sense does not mean the captains of the coal industry will not proceed with the project anyway.

Still winnable

The campaign to stop T4 is still winnable despite the approval of the loader. The industry is still powerful but is wounded compared to the height of the boom.

Activists in the Hunter have not organised a rally against T4 since early 2013 when a large, colourful and diverse crowd took to the streets demanding the proposal be torn up.

Arguably it is time to take to the streets once more to turn up the heat on PWCS to abandon T4 and to pressure the NSW government to revoke its approval of the unnecessary and unwanted loader.

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