Xstrata to build new Queensland port

The coal producer has submitted its preliminary environmental documents for the Balaclava Island Coal Export Terminal project to the federal government’s Environment Department. The project includes the development of a 13.5km rail spur from the North Coast railway line near Raglan to a higher ground coal stockpile area, and an overland conveyor from this site to the new port designed for vessels of up to 110,000 tonne capacity.Located 5km from Port Alma, landowner Gladstone Ports Corporation has given Xstrata the rights to build, own and operate the project on Balaclava Island and the adjacent mainland area.The proposed stockpile area, railway line and part of the conveyor route will be on privately owned land and Xstrata is in discussions with these landowners.Prefeasibility studies are expected to be completed by mid-2010, around the same time as the environmental impact statement will be publicly displayed.Legislative approvals are estimated to be performed in early 2011, with onsite construction slated for 2012 and commissioning in 2014.Xstrata expects the project to create 100 full-time jobs and an extra 800 during the construction phase.Documenting its reasons for the project, Xstrata said congestion at Queensland’s coal terminals had been a persistent issue for the state’s coal exports.“Even taking into account the current and proposed expansion plans of existing coal terminals and the development of the proposed Wiggins Island Coal Terminal, the projected future demand estimates for Queensland coal exports would not be fully met by these developments within their expected completion timeframes,” the company said.“Consequently development of the project could alleviate congestion at existing coal terminals located at Gladstone, Dalrymple Bay and Abbot Point through provision of additional export capacity and by potentially allowing more of the larger vessels to access these terminals while smaller vessels, to service Xstrata Coal Queensland’s customers, are directed to BICET.”Xstrata also gave its take on future coal demand and Australia’s market share.“Historical demand growth indicates the global seaborne thermal coal demand could increase by more than 60 million tonnes per annum on an ongoing basis once the current global economic conditions recover.“Australian coal exports constitute approximately one-third of this market and, accordingly, if market share is to be maintained, the annual increase in thermal coal demand from Australia will exceed 20 million tonnes per annum on an ongoing basis. “However, issues such as port congestion could jeopardise Australia’s share of this growing market as other countries such as Indonesia have substantial coal reserves and potential cost and supply chain advantages.”Xstrata added that GPC had advised that on the completion of the Wiggins Island Coal Terminal expansion, the RG Tanna Coal Terminal would have reached the limit of its development capacity, which has already been fully contracted.“The WICT, while not yet developed, has received indicative tonnage nominations from coal producers well in excess of its design capacity of 70 million tonnes per annum.”The BICET project is expected to cater for Xstrata’s Oaky Creek and Rolleston mines in the Bowen Basin, but could also be used as an alternative terminal for its giant joint venture Wandoan coal project in the Surat Basin, which is targeting 22Mtpa of thermal coal exports.Xstrata said further environmental assessment would be carried out on the significant impacts of the BICET project. Further dredging is required of the approach channel north of Balaclava Island, which is within the state marine park adjacent to the federal Great Barrier Reef Marine Park.The impact on landowners and graziers, as well as recreational fishing, salt mining operations and existing port activities, would also be identified. In submitting its documentation to the federal Environment Department, Xstrata aims to have BICET declared as a “significant project”, given the involvement required by all levels of government.Xstrata’s Queensland operations exported 26Mt in 2008, including 9.8Mt of coking coal and 16.2Mt of thermal coal.The company also operates the Abbot Point Coal Terminal and has directorship positions on WICT and the Dalrymple Bay Coal Terminal.The supplementary environmental impact statement for Wandoan is currently being finalised.

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