Plans to expand a coal port in Newcastle, New South Wales, have been scrapped by the developer because demand for coal has not increased enough to support the project.
Port Waratah Coal Services said on Thursday it would allow its lease for the T4 terminal to lapse when it expired next year because the capacity of existing terminals was likely to be sufficient for future growth in coal exports.
“With significant growth capacity available in the existing terminals, we do not expect that the conditions to support an investment of the large and long-term nature of Terminal 4 will be in place before the development approval lapses in September 2020,” the company’s chief executive, Hennie du Plooy, said.
Port Waratah’s existing terminals, Carrington and Kooragang, exported 105m tonnes of coal in 2017 – out of a combined capacity of 145 tonnes – the company said.
Green groups welcomed the news that the project would not proceed and said it was symptomatic of a larger trend away from fossil fuels.
NSW Greens’ resources and energy spokesman, Jeremy Buckingham, said he hoped the decision by Port Waratah could serve as a catalyst to transition away from coal to renewables.
“The cancellation of T4 at Newcastle Port is symptomatic of a global trend away from fossil fuels and towards clean, renewable energy,” he said.
“Reality is catching up with the great lie that we can continue to export coal in an age of climate change.”
Tim Buckley, director of energy finance studies at the Institute for Energy, Economics and Financial Analysis, said scrapping of the almost decade-long plan for the greenfield port development was caused by “the failure of thermal coal growth forecasts to materialise”.
“Australia is accelerating its energy system transition, even without any plan from our federal or NSW state government,” he said.
“This decision to let the lease lapse in 2020 is an important step to reduce the port’s fossil fuel stranded asset risk.”
Port Waratah entered into a lease agreement to potentially construct a fourth coal terminal in 2009 and held an option to extend this for a further 10 years.
“While Port Waratah will not build a fourth terminal, coal constitutes the bulk of Newcastle port volumes and will remain a big part of Newcastle’s future,” du Plooy said.
