Abbot Point Coal Terminal Expansion Project in Queensland Faces Further Delays

Researched by Industrial Info Resources (Perth, Australia)--The Abbot Point Coal Terminal in Queensland, Australia, is experiencing further delays due to required environmental approvals. The new Federal Environmental Minister, Mark Butler, has delayed his decision another four weeks, indicating that more time is needed to assess the project. The project has been facing a significant amount of opposition from several environmental groups because of uncertainty surrounding the disposal of millions of cubic metres of dredged soil, which is considered a major threat to the Great Barrier Reef.

The project is being developed by North Queensland Bulk Ports Corporation (NQBP). If completed, it would add another 120 million tonnes to its already existing capacity, making it one of the largest coal terminals in the world.

The expansion includes two more terminals. However, Terminal 2, which was being jointly developed by NQBP and BHP Billiton Metallurgical Coal (NYSE:BHP), has been put on indefinite hold due to the recent slump in coking coal prices. Terminal 3 is being developed by NQBP and GVK Hancock Prospecting in a 79:21 joint venture. Rio Tinto plc (NYSE:RIO) is considered to be the primary developer of the Abbot Point expansion; however, it pulled out in July 2012 due to the deteriorating market conditions and delays in the approval process.

Terminal 3 involves the construction of two berths, a wharf, a stacker and an overland conveyor system, which will enable a maximum throughput of 60 million tonnes per year. Hancock Coal will be exporting an estimated 30 million tonnes of coal produced at its planned Alpha Coal mine through Terminal 3 at Abbot Point. The coal will be transported by a 495-kilometre, single-track rail line, which will connect the Alpha mine to Abbot Point.

NQBP with Hancock Prospecting have recently selected Samsung C&T (Seoul, South Korea) and Smithbridge Australia (Murarrie, Queensland) as the major contractors for the construction of the Terminal 3 expansion. The contract is the second-largest contract for Samsung C&T in Australia, after it was recently awarded the EPC contract to develop the Roy Hill Iron Ore project for Hancock Prospecting in Western Australia.

There are plans to develop the Terminals 4 through 9 in the future. These plans will be integrated into the common-user infrastructure and multi-user cargo facilities. The fate of any future or associated expansion projects will depend on the future need and improving global economic conditions.

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