Storm cell hits coal port knocking out Newcastle shiploader part owned by BHP

Australia’s biggest coal port faces a cut in capacity after a storm cell knocked out a Newcastle shiploader.

the damage could potentially hit thermal coal supplies for several weeks.

Australia’s biggest coal port faces a cut in capacity after a storm cell knocked out a Newcastle shiploader, part owned by BHP, potentially hitting thermal coal supplies for several weeks.

The Newcastle Coal Infrastructure Group, a major coal terminal at the Port of Newcastle, suffered significant damage to one of its shiploaders at 8pm on Monday night after a major storm swept through the city.

The incident means the coal export terminal, which controls over a third of the Port of Newcastle’s coal capacity, will be forced to rely on a single shiploader for weeks or even months while the existing piece of equipment is repaired or replaced.

“Efforts are underway to ensure a safe working area, to ascertain the extent of the damage and to develop a recovery plan,” NCIG said in a statement, noting the terminal had restarted operations after a 24 hour shutdown.

The NCIG terminal is one of three that operate at the Port of Newcastle with the facility jointly owned by coal producers BHP, Whitehaven Coal, Peabody, Centennial Coal and Yancoal. It provides about 79m tonnes of the Port’s overall 224m tonne capacity although only about three-quarters of that capacity is used most years.

Still, it is estimated the damage could result in potential lost exports of 1m tonnes of coal if the shiploader is out even for two weeks, Shaw & Partners estimates.

The incident “means less steam coal going out for the next few weeks/months,” Shaw mining analyst Peter O’Connor said.

Port Waratah Coal Services operates the other two coal terminals with capacity of 145m tonnes.

“Port of Newcastle is assessing the potential impact of a storm that occurred on Monday. The most significant issue was the damage to a shiploader at the Newcastle Coal Infrastructure Group terminal. That issue affects one of its two shiploaders,” the Port of Newcastle said in a statement.

“It is too early to know the potential impact on overall export volumes. Actual volumes have been well below that theoretical capacity ceiling for some time, keeping within a narrow range of 158-166mtpa since 2014.”

Thermal coal volumes are due to “flatten out” over the next 15 years, according to Port of Newcastle chair Roy Green, who said the port giant would continue to export the ­resource as “long as there is a ­market”.

Thermal coal, shipped to Asian buyers for use in power stations, has endured a tough period with prices trading at half the level of two years ago, although a recent uptick has added come confidence for Australian producers.

Whitehaven chairman Mark Vaile told shareholders the recent increase in the thermal coal price - with the Newcastle benchmark price for coal lifting back above $US60/tonne - as the start of a “meaningful improvement”.

Still, tensions with China are keeping the broader coal industry on edge with the Asian superpower limiting its purchases of Australian coal.

Wood Mackenzie analyst Rory Simington said China appeared to be looking to restrict coal imports to 2017 levels, with the latest round of restrictions likely to hit Australian coking coal as well as thermal coal exporters.