Dudgeon Point Coal Terminal in Queensland Delayed Due to Slump in Coal Prices

Researched by Industrial Info Resources (Perth, Australia)--The continuous slump in coal prices in the international market has taken its toll on the planned Dudgeon Point coal terminal project in Queensland, along with many other coal projects across Australia. The project has been delayed by at least another two years, and the proposed construction date will be pushed back until late 2015.

The prices of coking coal have witnessed a sharp decrease of 40% in the last year, to about $130 per tonne, and thermal coal has dropped 30% in the last two years, to about $80 per tonne. The news adds to the already-grim outlook of the Australian coal mining industry, where Peabody Energy (TSX:BTU) and Xstrata Coal (ASX:XTA) recently have announced that they will slash almost 900 mining jobs.

The terminal is being jointly developed by North Queensland Bulk Ports Corporation (NQBP), Adani Mining and Dudgeon Point Project Management. The $10 billion project includes the construction of twin terminals, jetties, multiple berths, rail loops and train-unloading facilities to allow the export of up to 180 million tons per year of coal. The Dudgeon Point coal terminal would have been the first preferred option for Adani Mining's Carmichael mine for the export of its coal. Adani is also developing a 185-kilometre-long, heavy-haul, single-track rail project connecting its Carmichael mine to the Dudgeon Point coal terminal. The completion of the Carmichael mine was planned to coincide with the completion of the Dudgeon Point coal terminal. However, the delay definitely will have an adverse effect on Adani's proposed developments.

The Dudgeon Point coal terminal was planned for a site just north of the Hay Point Coal Terminal, which is undergoing its final stage of expansion. It would not have been viable to push forward on both coal terminal developments in the current market scenario.

"Because of the downturn in the coal market, a number of new mine developments in the Mackay region have been recently cancelled or deferred," said Bob Brunner, NQBP's general manager of planning.

Dudgeon Point development was opposed strongly by many environmentalist and marine conservation groups, and the news of the delay has reignited the calls to "can" the entire project.

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