North Queensland Export Terminal

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North Queensland Export Terminal is an export coal terminal at the Port of Abbot Point, in Queensland, Australia.

The facility is leased to the Adani Group of India and is the proposed destination for exporting coal from the Carmichael Coal Project in the Galilee Basin of Central Queensland, Australia.

Location

Abbot Point is the most northerly deepwater coal port of Australia, situated 25 kilometres north of Bowen, Queensland.[1] The port is near the Great Barrier Reef, a UNESCO world heritage site.

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Project Details

  • Owner: Adani Group, Ports Corporation of Queensland
  • Location: Townsville, Queensland, Australia
  • Capacity: 50 million tonnes per annum
  • Proposed Capacity: 10 million tonnes per annum
  • Status: Operating
  • Type: Exports
  • Coal source: Bowen Basin, Australia
  • Proposed coal sources: Carmichael Coal Project, Galilee Basin, Australia
  • Cost of expansion: US$1 billion[2]
  • Financing for expansion:

Background

The Abbot Point Coal Terminal began exporting coal in 1984. The terminal's annual export capacity increased from 15 to 50 million tons over the course of three expansion projects completed between 2007 and 2010 by Aurecon Hatch, a firm that has provided ongoing engineering, procurement and construction management services at Abbot Point. According to Aurecon Hatch's website, the X21 expansion, completed in 2007, increased annual capacity from 15 to 21 million tons; the X25 expansion, completed in 2008, further boosted capacity to 25 million tons; and the X50 expansion, completed in 2010, doubled the terminal’s capacity to 50 million tons.[3]

According to the Institute for Energy Economics and Financial Analysis (IEEFA), as of 2017 the port is only being half-utilized.[4]

Terminal facilities and coal mines

The North Queensland Bulk Ports Corporation states on its website, "Abbot Point has currently one operating terminal, Adani Abbot Point Terminal (AAPT or T1). It comprises rail in-loading facilities, coal handling and stockpiling areas and a single trestle jetty and conveyor connecting to two offshore berths and two shiploaders, all 2.8 km offshore. Coal is currently supplied to T1 by rail from the Newlands, Collinsville and Sonoma mines and a number of Bowen Basin customers such as BMA."[5]

2020: Adani renames terminal

In August 2020 it was reported that Adani was considering renaming the terminal as the “North Queensland Export Terminal." The Guardian noted that the name change came as Adani's "financiers continue to abandon the business and a Queensland court orders [Adani] to pay $106.8m in damages."[6]

In October 2020, Adani formalized the renaming of its coal port from Adani Abbot Point Terminal to North Queensland Export Terminal (NQXT). According to the NGO Market Forces, "It seems increasingly like Adani is trying to scrub its own name from its Australian coal operations – a clear sign that its brand has become so toxic not even Adani itself wants to use it."[7]

Lawsuits and financial troubles

August 2020: Queensland Supreme Court ruling

In August 2020, terminal operator Adani was ordered to pay four companies more than US$100 million after the Queensland Supreme Court found it had not offered ‘reasonable charges’ for access to its Abbot Point terminal. The four port users - Lake Vermont Resources, QCoal, Byerwen Coal and Sonoma Mine Management - had disputed the charges set by the coal terminal in relation to access and handling.[8]

2021: Terminal's financial problems worsen

In May 2021 it was reported that Adani's North Queensland Export Terminal had so far failed to secure external financing to repay a US$140 million debt due in September 2021. This is the third debt maturation in 12 months that Adani has failed to refinance externally, after A$100m in bonds due in May 2020 and a A$170m bank loan due in November 2020 was paid back out of Adani’s own finances, including shareholder loans. In response, S&P Global Ratings lowered its credit rating of Adani’s Abbot Point coal port from BB+ to BB– with a negative outlook, saying "we believe that the refinancing risks and borrowing costs associated with the project have increased. The credit margin for refinancing remain uncertain as the project has been unable to attract financing for its last two maturities (A$270 million); instead having to turn to its ultimate parent to provide shareholder loans."[9]

In addition to the debt repayments to cover the purchase of the port, Abbot Point Port had to borrow A$98 million to meet its legal liabilities arising out of the August 2020 Queensland Supreme Court decision, which found Abbot Point had overcharged some of its customers. In total, S&P’s downgrade assessment indicates that the North Queensland Export Terminal has a senior debt of A$1.34 billion.[9]

Ownership

The terminal, which is ultimately owned by the Ports Corporation of Queensland, a Queensland government-owned business[10], was operated by Abbot Point Bulk Coal Pty Ltd, a subsidiary of Xstrata Coal Queensland[11] until May 2011, when the Queensland government announced that the terminal had been leased to a subsidiary of the Adani Group for 99 years.[12]

Privatisation plan morphs into 99 year lease

As part of a privatisation of government-owned assets, the Queensland Government led by Premier Anna Bligh, in June 2009 identified the Abbot Point Coal Terminal for sale. In announcing the plan the Premier stated that the sale of the terminal and other assets would both raise cash to fill a projected budget shortfall it would also avoid the need for future state capital expenditure.[13] The government stated that they expected the sale of the terminal and associated infrastructure "is expected to earn more than $1.9 billion" and would "constitute an attractive package to investors."[14]

However, with mounting community and union opposition to the privatisation, the government opted to sell the lease rights for the terminal for a 99-year period. In early May 2010 Bligh announced that the lease for the X50 terminal - an expansion designed to lift export capacity to 50 million tonnes of coal a year -- had been sold to Mundra Port Pty Ltd, an Australian subsidiary of Mundra Port and Special Economic Zone Ltd, which in turn is a subsidiary of the Adani Group, for $1.829 billion. Bligh stated that the proceeds of the lease sale would "be set aside to fund Queensland’s share of the recovery from our summer of floods and cyclones."[12]

"This piece of infrastructure is designed purely to help coal companies make a profit. Taxpayers have done their bit to establish the terminal and entice investment, now it’s time for the private sector to take over," Bligh stated.[12]

Purchase of 99-year lease by Adani

In April 2011, Indian company Adani Enterprises, the country’s largest coal importer, agreed to buy the 99 year lease for the Abbot Point Coal Terminal for A$1.83bn ($1.98bn). The purchase was among a number placed by Indian groups in Australia and elsewhere as the country to secure energy resources to meet rising demand for power to complete infrastructure projects in India.[15]

Under the terms of the lease the land, "associated strategic infrastructure such as the jetty and wharves" would remain in public hands. Under the deal North Queensland Bulk Ports Corporation will act as "port authority for the Port of Abbot Point, responsible for the ongoing safety, security, efficiency and development of the Port."[12]

Proposed expansion

Plans that would have added several new coal export terminals at Abbot Point and increased the port's annual export capacity to as much as 230 million tonnes have suffered significant setbacks due to weakness in the global coal market and opposition to the terminal's expansion on environmental grounds. In recent years, several companies that had sought to establish terminals at the port - including Rio Tinto, BHP Billiton and Anglo American - have withdrawn from the project, and a number of major banks have also declined to provide financing for the expansion.

Expansion plans beyond 50 million tonnes

Even as the port's X50 expansion was being completed, the North Queensland Bulk Ports Corporation (NQBP) had begun proposing further expansions designed to increase annual capacity to approximately 230 million tonnes.[16] NQBP Chief Executive Officer Brad Fish said in mid-2010 that "if you were to fast forward about 10 years, it's not impossible to imagine that there could be four or five coal terminals sitting at the port of Abbot Point. That would make it, by a country mile, the largest coal port in the world."[17] In May 2011, NQBP Deputy Chief Executive Jeff Stewart-Harris told the Daily Mercury that the ultimate capacity of the terminal could eventually be 350 million tonnes of coal. [18]

Queensland Premier Anna Bligh's media release on the Adani lease deal stated that the government "will continue to facilitate future private sector-funded expansion of export infrastructure within the broader port precinct."[12] The rather cryptic statement referred to plans to expand the capacity of the port beyond the X50 expansion so that it can export 100 million tonnes a year or more.[14]

As of May 2011, the North Queensland Bulk Ports Corporation website stated that in addition to the X50 expansion, six additional coal export terminals were being considered, each with an approximate capacity of 30 million tonnes per annum. In late 2009 the ports corporation sought expressions of interest for the development of Terminals 2 and 3 (T2 and T3, previously referred to as the X80 and X110 projects). The corporation stated that "the Preferred Developers, Hancock Coal Limited and BHP Billiton Limited are currently working with NQBP to enter into a Framework Agreement to progress the project and are finalising preliminary design and environmental studies."[16]

The corporation also stated that "NQBP has developed plans to facilitate the development of four additional separate tranches, each nominally 30mtpa, of coal terminal capacity." These projects were referred to as T4, T5, T6 and T7. To assess preliminary demand for additional terminals at T4-7, in December 2010 NQBP held a customer forum to outline the proposed development and invited non-binding indicative expression of interest for terminal capacity from users. Given the high level of indicative demand, the next step proposed by NQBP was to run a formal EOI process.[16]

In May 2011 NQBP deputy chief executive officer Jeff Stewart-Harris said that he was hoping that the federal government would allocate $500 million from Infrastructure Australia in the budget towards the cost of establishing a "multi-cargo facility" which would include additional coal handling capacity. The facility would cater for BHP-Billiton and Hancock Coal's terminals 2 and 3 and cater for terminals 4 to 7 in the longer term. The establishment of the multi-cargo terminal would, he said, cost about $2.3billion and require the dredging of 20 million cubic metres of material and the construction of eight kilometres of rock wall. The facility would cater for 12 capesize shipping berths. The first stage of the facility, he said, would cost approximately $1 billion.[19]

By the end of 2011, the number of terminals planned for the port had increased to nine, and the Queensland government had identified six "preferred respondents" for terminals 4 through 9: Anglo American Metallurgical Coal, Macmines Austasia, North Queensland Coal Terminal (a consortium of Macarthur Coal, Peabody Energy, New Hope Corporation, Middlemount Coal and Carabella Resources), Rio Tinto Coal, Vale and Waratah Coal.[20]

Newman government pulls back on expansion plans

In late May 2012 the Queensland Minister for State Development, Infrastructure and Planning, Jeff Seeney, announced that it was pulling back from pushing for the development of terminals 4-9 and the multi-cargo facility to concentrate on the development of BHP-Billiton's terminal 2 and Hancock Coal's terminal 3. Announcing the decision Seeney stated that "we consider that expansion at Abbot Point should be incremental. We will proceed with T2 and T3 and will discuss with industry what additional capacity is needed as that expansion is underway,” Mr Seeney said. "The proposals outlined by the Bligh Government were unrealistic and undeliverable. They were never going to come to reality.”[21]

Seeney sought to blame the retreat on terminals 4-9 on the federal government's environmental assessment process and the likely time it would take to get approvals for the expansions. "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 additional capacity would realistically be warranted,” Seeney said.[21]

Seeney's announcement followed confirmation by Queensland Treasurer Tim Nicholls that Rio Tinto had withdrawn its bid for additional port capacity. In a media release Nicholls stated that Rio Tinto had informed the government that its withdrawal was "in part" due to environmental assessment procedures but that was the only element he emphasised in his media release.[22] However, the Australian Financial Review reported that "Nicholls said Rio Tinto had told the government the reasons for pulling out of the expansion were rising costs, uncertain markets and the long time frames for regulatory approvals."[23]

January 2015 update on proposed expansions

As of January 2015, future expansion plans for the port remain in limbo. Between 2012 and 2014, several companies originally slated to participate in the port expansion withdrew their support for the project. After Rio Tinto announced its plans to pull out of Abbot Point in April 2012[24], BHP Billiton followed suit in November 2013[25], followed by the construction firm Lend Lease in February 2014 [26] and multinational mining company Anglo American in March 2014 [27]. In addition, the project has run up against strong opposition from environmentalists and reluctance on the part of major banks to provide financing.

Adani Mining continues to forge ahead with its plans to develop the Abbot Point terminal and an associated railway linking the port to its Galilee Basin mines, including the Carmichael Coal Project. As of January 2015, the Adani Mining website states that "The Galilee Basin is potentially the last undeveloped coal resource within Queensland and has the potential to become the largest coal producing region in the State. Adani is proposing to develop the North Galilee Basin Rail Project (NGBR Project) to transport coal from the Galilee Basin to the Port of Abbot Point via a multi-user, greenfield, standard gauge rail line."[28] Adani has partnered with the Korean construction group Posco to build the 308km rail link, aided by a reported $450 million in state government subsidies.[29] The 310km NGBR railway won approval from the Australian government in October 2014; however, environmentalists have expressed strong opposition to Galilee Basin coal mining and development of a major coal port so close to the Great Barrier Reef and have launched petitions and legal proceedings to block Adani's plans.[30][31]

In October 2014, Adani reiterated its commitment to the Abbot Point terminal project, despite the decision of major banks including Goldman Sachs, Citigroup and JPMorgan Chase not to finance the project due to environmental concerns.[32] In November 2014, responding to falling coal prices and diminishing interest among other potential developers, Queensland's state government offered to contribute an unspecified amount ("hundreds of millions, but not billions" of dollars) in incentives towards construction of Adani's proposed $2.2 billion rail line between Galilee and Abbot Point.[33] Meanwhile, Adani signed a memorandum of understanding with the State Bank of India for a loan of up to $1 billion to help finance the project.[34]

In January 2015, Australia Mining reported that Adani had awarded a US$2 billion contract to the Australian engineering company Downer EDI for development of Adani's Galilee Basin mines, with mine construction slated to start in 2015 and coal production expected to begin in 2017.[35]

In January 2015, GVK Hancock, the other company still actively planning to export coal from Abbot Point, expressed concern that the Queensland government was unfairly favoring the Adani Group by fast-tracking plans to build an onshore dump for dredge spoil from Abbot Point. The government's move, which is intended to expedite Adani's port expansion plans, is seen by GVK Hancock as potentially detrimental to its own infrastructure projects. The dredging plan also prompted concern from Aurizon, the Queensland government’s privatized rail freight company, which has joined forces with GVK Hancock to build a 300km rail link from GVK Hancock's mines to Abbot Point. Aurizon questioned a proposal from the Queensland government's Department for Infrastructure and Planning that called for material from the dredging operation to be used in the construction of rail embankments, maintaining that not enough was known about the dredge material that will be gathered at the project.[29][36]

In January 2015, Queensland's newly elected Labor Party stated that taxpayer funds should not go toward Adani's rail project or the dredge spoil dumping operation, noting that “The stewardship of the Great Barrier Reef necessitates that we have a comprehensive climate change policy.”[37]

On 17 April 2015, the Queensland Government lodged an application with the Commonwealth Department of the Environment to begin the approval process for Adani's proposal to increase the port's capacity from 50 to 120 million tonnes per annum. The "Abbot Point Growth Gateway Project," as the expansion is called, involves dredging 1.1 million cubic metres in situ of seabed. Adani's proposed dredging area is approximately 61 hectares of seabed within port limits, outside the Great Barrier Reef Marine Park. A full EIS is required and will be available for comment later in 2015.[38] As of June 2015, a total of 11 international banks have publicly distanced themselves from the Galilee Basin coal projects and its financing, including HSBC, Barclays, Morgan Stanley and Citi.[39]

In June 2015 UNESCO decided against listing the Great Barrier reef as being in danger but said the Australian government is on notice that it must submit a detailed review in 18 months over changes to the management of the area. International delegates stressed the need to bolster the reef's resilience to climate change and limit the development of ports in the area.[40]

2018: Expansion downscaled to 10 mtpa

As of 2018, the only companies actively seeking to continue with port expansion plans are the port's leaseholder Adani Group and GVK Hancock (a joint venture between the Indian company GVK and Australia-based Hancock Prospecting). Adani is pursuing the Carmichael Coal Project and would use the terminal to export the coal to India. Adani has yet to secure financing for the project, with both Australian and Chinese banks ruling out funding. GVK has been pursuing the Alpha Coal Project in the Galilee Basin, adjacent to the Carmichael mine, but has also faced problems with financing.[4]

In July 2018, Adani applied to increase the export capacity at its Abbot Point coal terminal by 10 million tonnes a year. The proposal would increase the capacity of terminal 1 from 50 to 60 mtpa. Plans for a second terminal, which would require dredging and other works to increase capacity to 90 million tonnes a year, would be downsized and deferred but not scrapped.[41]

May 2020: Expansion work stalled

In May 2020 it was reported that the expansion project at Abbot Point Terminal was on hold due to difficulties in securing funding.[42]

August 2020: Rail connection

In August 2020 the Bowen Rail Company (BRC) was publicly launched as a wholly-owned subsidiary of Adani Ports. The role of this Adani Ports-owned company is to set up and run the haulage operations from the Carmichael mine to Adani’s North Queensland Export Terminal.[43]

June 2024: Expansion proposal is presumably canceled due to no updates during the past four years

In Jun 2024, the International Finance Review wrote that NQXT was searching for a second private credit loan to complete the refinancing of the Australian coal export facility. At the time being, the total capacity of NQXT was still 50 mtpa.[44]


Articles and resources

References

  1. ↑ "NQBP Abbot Point". Norh Queensland Bulk Ports North Queensland. Archived from the original on 26 October 2009. Retrieved 2010-02-07. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  2. ↑ "Adani’s Carmichael coal mine a step closer," The Courier-Mail, April 16, 2015
  3. ↑ "Abbot Point Coal Terminal, Australia", Aurecon website, accessed January 2015.
  4. ↑ 4.0 4.1 Michael Slezak, "Is this the end of the road for Adani’s Australian megamine?" The Guardian, Dec 6, 2017
  5. ↑ "Abbot Point Port", North Queensland Bulk Ports Corporation website, accessed January 2015.
  6. ↑ Adani quietly rebranding Abbot Point terminal as company hit with $107m damages bill, The Guardian, Aug. 28, 2020
  7. ↑ "Adani rebrands Abbot Point coal port to Nth Qld Export Terminal," Market Forces, October 9, 2020
  8. ↑ Thomas, Tanya (2020-08-28). "Australian court orders Adani Abbot Port to pay $106 million over port dispute". LiveMint. Retrieved 2021-07-14.
  9. ↑ 9.0 9.1 "Adani's coal port failing to refinance debt, again - Market Forces". Market Forces. 2021-05-07. Retrieved 2021-07-14.
  10. ↑ North Queensland Bulk Ports Corporation Limited, "NQBP Ports", North Queensland Bulk Ports Corporation Limited website, accessed November 2010.
  11. ↑ "Abbot Point", North Queensland Bulk Ports Corporation website, accessed November 2010.
  12. ↑ 12.0 12.1 12.2 12.3 12.4 Anna Bligh (Premier and Minister for Reconstruction) and Rachel Nolan (Minister for Finance and Arts), "Premium price for Abbot Point Coal Terminal boosts disaster recovery", Media Release, May 3, 2011.
  13. ↑ Anna Bligh (Premier and Minister for the Arts) and Andrew Fraser (Treasurer and Minister for Employment and Economic Development), "Renewing Queensland: Future investment Plan", June 2, 2009.
  14. ↑ 14.0 14.1 Anna Bligh (Premier and Minister for the Arts) and Andrew Fraser (Treasurer and Minister for Employment and Economic Development), "Seamless Export Chain for Future Growth", Media Release, June 2, 2009.
  15. ↑ Peter Smith & James Fontanella-Kahn, "Adani buys Australian coal port for $1.98bn", Financial Times, May 3, 2011.
  16. ↑ 16.0 16.1 16.2 North Queensland Bulk Ports Corporation, "Abbot Point", North Queensland Bulk Ports Corporation, accessed May 2011.
  17. ↑ Ben Sharples, "Australia’s Abbot Point Seeks to Be Biggest Coal Port", Businessweek, June 25, 2010.
  18. ↑ Melissa Grant, "Aust's biggest coal terminal plans"., Daily Mercury, May 10, 2011.
  19. ↑ Melissa Grant, "Aust's biggest coal terminal plans", Daily Mercury, May 11, 2011.
  20. ↑ "Australia’s Abbott Point Plans for Future Expansion" , Coal Age, December 1, 2011.
  21. ↑ 21.0 21.1 Jeff Seeney, Minister for State Development, Infrastructure and Planning, "New focus on Abbot Point expansion", Media release, May 21, 2012.
  22. ↑ Tim Nicholls, "Labor delays risk Queensland investment and jobs", Media Release, April 20, 2012.
  23. ↑ Mark Ludlow and Dan Hall, "Rio Tinto pulls out of port" , Australian Financial Review, April 21, 2012.
  24. ↑ "Rio Tinto pulls out of Australia's Abbot Point coal expansion project", Platts, April 24, 2012.
  25. ↑ "BHP Billiton scraps plans for new coal port at Abbot Point in Queensland", The Guardian, November 3, 2013.
  26. ↑ "Green group applauds Lend Lease Abbot Point pullout", ABC, February 26, 2014.
  27. ↑ "Anglo says no to Abbot Point", The Australian Business Review, March 8, 2014.
  28. ↑ "North Galilee Basin Rail Project", Adani website, accessed January 2015.
  29. ↑ 29.0 29.1 "Abbot Point: onshore dump would favour Adani, say coal miners", The Guardian, January 12, 2015.
  30. ↑ "Environmental group takes Adani’s Carmichael mine to court", Mining Australia, October 9, 2014.
  31. ↑ "Activists Gun For Indian Billionaire's Great Barrier Reef Project", Forbes, December 2, 2014.
  32. ↑ "Abbot Point coal development progresses, but banks back away from the project amid environmental concerns", ABC Bush Telegraph, October 31, 2014.
  33. ↑ "Newman government courts Adani on Galilee Basin coal deal", The Saturday Paper, November 22, 2014.
  34. ↑ "Adani lines up $1 billion SBI loan for Australian coal venture", Reuters, November 17, 2014.
  35. ↑ "Adani awards Downer EDI $2 billion coal contract", Mining Australia, January 5, 2015.
  36. ↑ "Aurizon raises questions over government plan to use dredge spoil for rail works at Abbot Point", ABC, January 19, 2015.
  37. ↑ "Adani’s Carmichael Coal Proposal Will Now Have to Rely on Commercial Viability," IEEFA, Jan 31, 2015
  38. ↑ "Abbot Point Growth Gateway Project," Queensland Government, updated June 9, 2015
  39. ↑ "Australian banks under pressure after French lenders rule out funding Galilee Basin coalmines," Guardian, April 8, 2015
  40. ↑ "Great Barrier Reef UNESCO verdict confirmed but future status remains murky," Sydney Morning Herald, July 1, 2015
  41. ↑ "Adani lodges slimmed-down plan to expand Abbot Point coal terminal". the Guardian. 2018-07-31. Retrieved 2021-07-14.
  42. ↑ "Adani Group's Port Expansion Project Near Great Barrier Reef 'On Hold'". Mining Global. 2020-05-17. Retrieved 2021-07-14.{{cite web}}: CS1 maint: url-status (link)
  43. ↑ Robertson, Josh (2020-09-09). "Adani uses new name to quietly launch own rail company". ABC. Retrieved 2021-07-14.
  44. ↑ "Private credit rescues Adani’s NQXT", International Finance Review, Jun 21st, 2024.

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