Miners target Port of Newcastle over lack of regulation

Coal miners have launched a campaign targeting the ‘non-existent’ regulatory oversight of the Port of Newcastle, as Coalition MPs ramp up attacks.

An aerial view of the Port of Newcastle. Picture: Supplied

Coal miners have launched a campaign targeting the “non-existent” regulatory oversight of the Port of Newcastle, as Coalition MPs ramp up attacks on the key export facility’s Chinese ownership structure.

The world’s largest coal export port is facing pressure over pricing wars with major Hunter Valley coal miners led by Glencore, after Australian Competition and Consumer Commission chair Rod Sims told a Senate estimates hearing the port was a “monopoly”.

Under questioning from north Queensland Nationals senator Susan McDonald, Mr Sims described as “non-existent” the current regulatory oversight of the Port of Newcastle, whose half-owner is China Merchants Group.

“The issue we are concerned about is where entities are privatised and obviously the selling government wants to maximise proceeds. So they privatise a monopoly without any regulation,” Mr Sims said.

“And what happened in the Port of Newcastle was as soon as they were privatised they ramped the fees up by 50 per cent and added $700 million to their value. Pretty good money if you can get it. I think the state government got a lot of money for selling it but the users are now effectively paying that 50 per cent when they shouldn’t be.”

NSW Minerals Council chief executive Stephen Galilee described as “concerning” confusion within the government about “the ACCC’s role in relation to the Port of Newcastle”.

“As Rod Sims confirmed, the Port of Newcastle is a monopoly, yet current government policy allows it to operate without any ACCC oversight or role. This is extremely concerning for us as major users of the port without any alternative provider,” Mr Galilee told The Australian.

“We have been seeking policy changes to address this issue for some time. However, the proposed changes announced in the budget actually go in the opposite direction by further weakening what little scope there currently is for any ACCC involvement.”

The port’s ownership structure, with China Merchants Port Holdings Company and The Infrastructure Fund each holding a 50 per cent stake, was also raised by Coalition senators during last week’s estimates hearings.

In its first detailed response following last week’s hearings, a Port of Newcastle spokeswoman defended the port’s ownership structure and said its long-term pricing for coal navigation was “within the bounds of reasonable pricing and do not exceed the range of possible outcomes or prior decisions on this matter”.

“PON’s ownership comprises an Australian infrastructure investment fund – with the long-term retirement savings of about two million Australians – teamed up with a highly experienced international port operator, which itself has a range of investors, including major Australian superannuation and investment funds,” the spokeswoman said.

The port spokeswoman said Josh Frydenberg had earlier this year determined, following a detailed investigation by the National Competition Council, that “no regulation of the Port of Newcastle under the national access regime is warranted or would be beneficial to export markets”.

“The reason for this is that port is not abusing its position as the long term operator of one of Australia’s most significant export gateways in accordance with its agreements with the state of NSW,” she said.

She said Mr Sims was referring to a “one-off pricing correction seven years ago after decades (of) historical under recovery of costs by the state of NSW”.

“Since then prices at the port have risen in line with inflation. Port of Newcastle has been under continuous regulatory scrutiny for almost six years.”