A $9 billion privately funded enlargement of Abbot Point coal terminal in North Queensland has been killed by the Newman State Government, a project that would have created one of the largest coal ports in the world and helped expand the coal industry.
In another sign that Australia's resources boom is slowing, Queensland Deputy Premier and Infrastructure Minister Jeff Seeney said the new Liberal National Party Government had decided to scrap the T4 to T9 expansion of the coal terminal and a $2.3b 12-berth cargo facility.
Other big resources projects also at risk from falling commodity prices include South Australia's giant Olympic Dam copper and uranium mine owned by BHP Billiton, which said this week it wouldn't spend $80b previously budgeted for new projects.
Woodside Petroleum is slowing the pace of its troubled $35b Browse gas project in Western Australia.
Mr Seeney said the former Bligh Labor government tried to expand Abbot Point coal terminal too quickly. The port is designed to become the main export hub for the undeveloped Galilee Basin.
The departure of two major players from negotiations to build the new terminals at Abbot Point, including Rio Tinto, in recent months contributed to the demise of the project. Only two companies out of the six bidders chosen to build the new terminals paid a deposit on the $75 million investment required and will now be refunded the money.
The full expansion of Abbot Point coal terminal, near Bowen, about halfway between Townsville and Mackay, was planned to be the departure point for 400 million tonnes of coal a year by the end of the decade.
Mr Seeney denied that the decision was evidence of the slowdown in the state's resources boom. But he admitted capital constraints on global markets, concerns about environmental regulation and the length of approval times for the project contributed to the failure of the expansion.
"I don't think it's a case of the boom coming off the boil. I think it's a case of the previous government getting carried away by the boom," Mr Seeney said.
"We just don't believe it's deliverable. We're focused on delivering something that is realistic in the shortest pos- sible time. We will be looking to providing access at Abbot Point to everybody who wants access."
Mr Seeney said former premier Anna Bligh and former treasurer Andrew Fraser had pushed ahead with a bigger expansion of Abbot Point in a grab for more cash.
"I think the Bligh government was motivated by the wrong thing. They saw Abbot Point as a revenue-raiser," he said.
The government's decision to bin the T4 to T9 coal terminals threatens to further delay the expansion of the state's coal industry, as coal majors BHP Billiton and Rio Tinto reconsider their growth plans.
Abbot Point was shaping as an important alternative to existing coal ports at Dalrymple Bay, near Mackay, and Gladstone, especially for mines in the northern Bowen Basin and Galilee Basin. Last week Rio Tinto chief executive Tom Albanese said high diesel prices, labour costs and equipment costs threatened the development of its $2b Mt Pleasant thermal coal project in the Hunter Valley, NSW.
The sentiment was echoed by BHP Billiton chairman Jac Nasser this week when he said Australia risked squandering the commodities boom through poor tax and industrial relations policies.
BHP closed its Norwich Park coal mine in the Bowen Basin this month amid rising costs and a lengthy industrial dispute.
Last year the former Bligh government sold the existing Abbot Point coal terminal to Indian power giant Adani Group for $1.8b. It is being expanded to a capacity of 50 million tonnes a year.
BHP Billiton and Hancock Coal, owned by Gina Rinehart and her family, plan to build two neighbouring terminals. They are all still proceeding.
In a letter to North Queensland Bulk Ports Corporation chief executive Brad Fish, Mr Seeney said the size of the multi-cargo facility, which had yet to be approved by the Federal Government, was what ultimately sunk the project.
"The significant scale, complexity and potential impacts of the proposed infrastructure are extensive and it would be many years before the whole of the planned capacity would be realistically warranted," he said.
There was no guarantee the project would have been given environmental approval by the Federal Government.
The companies originally chosen to build the six new terminals at Abbot Point were Anglo American Metallurgical Coal, Rio Tinto Coal, Brazil's Vale, Clive Palmer's Waratah Coal, Macmines Austasia, and the North Queensland coal terminal consortium of Macarthur Coal, Peabody Energy, New Hope Corporation, Middlemount Coal and Carabella Resources.
Rio Tinto told the government it was pulling out because of rising costs, uncertain markets and the long waiting times for regulatory approvals.
