BRISBANE, Australia, May 13 (UPI) -- Glencore Xstrata is dropping plans for a $1 billion coal export terminal in Queensland, Australia, the company said.
Port Waratah Coal Services, which operates the world's largest coal-export facility at Newcastle in New South Wales, Australia, last month said it had put off plans to build a new coal terminal that would have expanded its shipping capacity by more than 80 percent, The Wall Street Journal reports.
Glencore Xstrata's proposed facility was intended to ship up to 35 million tons of coal a year. The site, at Balaclava Island, about 25 miles north of Gladstone, would have opened a new route for coal exports from the Surat and southern Bowen basins in Queensland to buyers in Asia.
"This decision has been made as a result of the poor current market conditions in the Australian coal industry, excess port capacity in Queensland, specific shipping limitations and concerns about the industry's medium-term outlook," Glencore Xstrata said in a statement Monday.
"In the long-term, we believe Australia will need to increase its coal export capacity in an efficient and internationally competitive manner, in response to increased demand for coal in Asia," the company said.
Minerals Council of Australia Chief Executive Officer Mitch Hooke was quoted as saying by The Australian that the Glencore Xstrata announcement "underscores why there should be no new taxes imposed on Australia's minerals industry ... Australian mining is already at the Mount Everest of global tax rates. Enough is enough."
Glencore Xstrata had earlier said an environmental impact statement wouldn't be submitted for the project until there was a better understanding of the federal and state government port strategies.
A report published in The Australian May 14 quoted Glencore Xstrata's head of global coal assets, Peter Freyberg as saying that Australia's coal industry was being "smashed" by lower prices, a strong dollar and the high cost of doing business in the country.
Approximately 9,000 jobs have been cut in the sector in the past 12-15 months.
"Instead of supporting one of Australia's largest export industries, policymakers at both a state and federal level have imposed additional costs, taxes and other burdens at a time when the industry is under enormous pressure," Freyberg said.
Australian Coal Association Acting Chief Executive Officer Greg Sullivan said the sector was facing the most difficult operating conditions for more than a decade and warned that Australia's future as a major coal-exporter could be jeopardized by a government which he said "fails to recognize and act on these extremely difficult operating conditions."