ACCC allows miners to collectively negotiate Newcastle port access

The competition regulator has granted interim permission for 10 coal companies in NSW to collectively negotiate access to the Port of Newcastle.

Coal ship BBG Honor, Hong Kong, is loaded with coal in the Port of Newcastle. Picture: Liam Driver

The competition regulator has granted interim permission for 10 coal companies in NSW to collectively negotiate the terms and conditions for accessing the Port of Newcastle for exporting operations.

The Australian Competition & Consumer Commission has released a proposal that will allow producers to undertake joint negotiations with the port, in order to reach an agreement on the terms of use, which will include the price of access.

Since December 2019, the Port of Newcastle has been negotiating with individual coal producers regarding a 10-year agreement for port access.

The ACCC said the collective bargaining was voluntary and did not include any intended collective boycott activities.

ACCC commissioner Stephen Ridgeway said collective negotiations with the port were likely to provide wider public benefits and ultimately support the Hunter Valley coal industry.

“Collective negotiation gives coal producers an opportunity to reduce uncertainty and achieve more timely outcomes,” he said.

Mr Ridgeway also noted the proposal would still give coal producers the ability to individually negotiate with the port.

A final decision on the proposal will be made in August or September.

The privately owned port was bought for $1.75bn in 2014 by a consortium including The Infrastructure Fund and China Merchants Port Holdings but has faced ongoing lawsuits over its coal pricing from customers.

Brawling between Newcastle Port and Glencore began within a year of privatisation, after fee increases, when the miner launched legal action aimed at giving competition regulators oversight of charging at the port.

The Port of Newcastle argued that charges through its shipping channel had remained relatively static for decades under government ownership.

It said the fee hikes were needed to improve facilities and infrastructure after decades of underinvestment by the NSW government.

Glencore lost the first round, when the National Competition Council agreed with the port’s position, saying it had every incentive to maximise export volumes and no reason to put the squeeze on its biggest customers.

But the mining giant took the dispute to the Australian Competition Tribunal and won, and then defended the victory from challenges in the Federal Court. The disputes flared again in 2019 with renewed vigour, when the port asked the NCC to make a new determination on the issue.