PERTH (miningweekly.com) – The A$5-billion T4 project at Port Waratah has been shelved for the time being, as coal exporters cut back on contract tonnages.

Port Waratah Coal Services (PWCS) said this week that it had accepted voluntary reductions in contract tonnages from the majority of the Hunger Valley coal producers.

The reduction in tonnage meant that there was no capacity shortfall to be fulfilled through the proposed T4 coal loader project.

“That said, a capacity shortfall requiring additional terminal capacity can arise at any time as a result of producer nominations,” PWCS said this week.

The service provider said it would continue to seek development approval for the T4 project, fulfilling its obligations under the long-term commercial framework, which underpins contractual arrangement in the Hunter Valley coal chain.

The T4 project had initially been envisaged to add a further 120-million tons a year of capacity to PWCS’s current 142-million-ton-a-year capacity, but the overall size of the loader would have been dependent on the planning approvals process.

It had been hoped that the T4 project would have come on-stream by mid-2017.

PWCS CEO Hennie du Plooy noted that producers had advised the services provider that the reduction in future demand for coal handling services was owing to a number of factors affecting the coal industry, including lower-than-forecast production growth, an ongoing shortfall in rail track capacity and mine project approvals taking longer than expected.

Du Plooy said a delay of the T4 development was a positive and appropriate outcome for the industry during challenging times.

“Coal producers who do not require all tonnage previously contracted for, have been able to reduce their exposure to ship-or-pay obligations, while producers who still require greater capacity for coal handling and were expecting to rely on T4 now have access to existing capacity, increasing certainty of access and timing.”

He added that, at a time when the industry was experiencing significant economic challenges, PWCS had also been able to reduce handling costs for producers by avoiding unnecessary project expenditure.