Coal producers can collectively negotiate with Port of Newcastle

Newcastle LNG, coal producers
The Port of Newcastle

The ACCC has granted interim authorisation to the NSW Minerals Council and 10 coal producers to collectively negotiate with Port of Newcastle Operations (PNO) on terms and conditions of access to the port for coal exports, including prices.

The 10 coal producers that export coal through the Port of Newcastle are Glencore Coal, Yancoal Australia, Peabody Energy Australia, Bloomfield Collieries, Centennial Coal, Malabar Coal, Whitehaven Coal, Hunter Valley Energy Coal, Idemitsu Australia, and MACH Energy Australia.

The interim authorisation does not allow the producers to enter into collectively negotiated agreements with PNO, or allow them to share individual coal projection volumes, customer pricing information or marketing strategies.

Related article:Power prices to fall for regional Queenslanders

PNO is currently negotiating with individual coal producers over a proposed 10 year deed for access to the port. The ACCC considers that allowing coal producers to collectively negotiate will give producers an opportunity to reduce ongoing uncertainty and achieve more timely outcomes.

“We have granted this interim authorisation because coal vessels will soon be facing higher port service charges if coal producers don’t execute a deed with the Port of Newcastle,” ACCC Commissioner Stephen Ridgeway said.

“Because participation is voluntary we do not believe this authorisation will impact competition between the producers. Individual coal producers are still free to negotiate separately if they believe they can get a better deal.

Related article:New Ergon Energy depot creates jobs for local workers

“PNO is also free to decide whether or not to negotiate with the coal producers collectively.”

The ACCC welcomes further comments on the application to inform its assessment of this matter. A draft determination is anticipated for May or June 2020 and a final determination will be made in July or August 2020.

Further information, including the application for authorisation and details about how to make a submission are available on the ACCC’s Authorisations Public Register.