Article: Delays at Queensland's Dalrymple Bay coal terminal cost firms $500m

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Delays at Queensland's Dalrymple Bay coal terminal cost firms $500m

Delays at Queensland's Dalrymple Bay coal terminal cost firms $500m
Tony Koch and Andrew Fraser | October 02, 2009

Article from:  The Australian

COAL companies are paying an extra $500 million every year in charges incurred while waiting forships to load at the troubled North Queensland port of Dalrymple Bay.

The port's capacity has recently expanded from 68 million tonnes annually to 85 million tonnes, but yesterday The Australian counted 78 ships waiting to load, higher than the queues of 60 ships recorded in 2006. A blame game broke out yesterday between Queensland Rail, the main hauler of coal to the port, the port operators and the coal companies over who was responsible for the situation.

The operators said yesterday there had been a record tonnage of coal through the port in recent months, while QR claimed it had exceeded its contractual obligations in carting coal, and suggested the present system encouraged coal companies to over-order ships to come to the port.

Dalrymple Bay is the main export port for coal in North Queensland, but while orders from Japan and China in particular have rebounded strongly in recent months, the other main port that ships coal, Gladstone, had a queue of 15 ships waiting to be loaded yesterday.

There has been some work done in recent weeks on the line running inland from Dalrymple Bay to the coalfields, which has caused some delays, while QR still has to finish upgrading railway yards at Jilanan, just inland from the port. When both these situations change, the throughput on the line should improve.

But coal companies claimed they were paying for the infrastructure bottlenecks, with Macarthur Coal chairman and former
Queensland government treasurer Keith De Lacy saying the industry had rebounded rapidly from the doldrums of the global financial
crisis. "Probably we were the first into the crisis and the first out," Mr De Lacy said.

"Sales of coal now are as strong as they have ever been. The problem at Dalrymple Bay at Mackay, where the vast bulk of the Bowen Basin coal is exported, is that delivery of the coal is based on premium performance of infrastructure, and that is not being delivered. Producers like Macarthur Coal have to pay for the ships staying at anchor out off the port. We pay the demurrage for the ships sitting out there.

"Last year, we paid $5 a tonne for demurrage, and if you look at the two loading terminals of Hay Point and Dalrymple Bay, there are 100 million tonnes of coal going through the two ports each year. That makes half a billion dollars a year just to pay for the delays that are caused by the inability of coal infrastructure."

But QR coal executive general manager Marcus McAuliffe said QR had been hauling record tonnages in the Goonyella system, with more than two million tonnes hauled in each of the past two weeks. "The current load-in-arrival-order system running into Dalrymple Bay promotes coal companies ordering more ships than their contracts," he said.

"There is nothing QR can do to control the volume of ships arriving. The supply chain is complex and we are only one member of that chain. It will require a whole-of-supply chain solution to address this issue."

Dalrymple Bay chief executive Eric Kolatchew said that when all the infrastructure leading to the port was in place, there should be only 15 to 20 ships waiting to be loaded. "Since we've had our upgrade, we can ship everything that we've been given. We can shoot it out very quickly."

Mr Kolatchew said only 58 of the waiting ships were bound for Dalrymple Bay, with the remainder waiting to be loaded at the adjacent wharf of Hay Point, which is fully owned by BHP.

Queensland Resources Council chief executive Michael Roche said while the performance of the port and QR had improved, there were still some issues remaining. "QR still has some way to go with its rolling stock problems, and everyone in the industry is looking forward to them being overcome," he said.