Court appeal leaves Hunter coal industry in investment uncertainty

Federal Court

The Hunter coal industry is facing investment uncertainty following the appeal against the Australian Competition Tribunal’s decision regarding pricing at the Port of Newcastle.

The Australian Competition Tribunal determined the appropriate price that should apply to coal ships accessing the Port of Newcastle on 30 October 2019, following a four year legal battle initiated by global mining company Glencore.

The Australian Competition and Consumer Commission and Glencore have each recently commenced separate but overlapping appeals against the decision in Melbourne and Sydney in the Federal Court.

The Tribunal – which comprises a Federal Court judge and experts in industry, commerce, economics, law and public administration appointed by the Governor-General – is the review body called upon to reconsider and rule on such competition matters. 

The Tribunal’s decision noted the importance of ensuring that prices be at a level that provides an “incentive to a service provider to efficiently (and in a timely fashion) invest in maintaining and improving infrastructure necessary to provide facilities at the port”.  

The Tribunal also expressed concern that “prices that are too low can lead to non-investment or delayed investment, or the non-provision of some infrastructure services”. 

It follows the Australian Government’s announcement in September 2019 regarding the revocation of the declaration of service at the Port of Newcastle, which brought to an end a period of uncertainty for all parties and enabled the port to deal directly with its users. 

Port of Newcastle CEO, Craig Carmody, said it was disappointing to see further uncertainty for everyone. 

“Port pricing should remain subject to an appropriate and efficient commercial relationship between the port and its customers,” Mr Carmody said. 

“The endless legal battles erode confidence in investing in infrastructure, be it at the mine or at the port, in one of Australia’s most important export industries. 

“We will continue to sit down with our customers to discuss our services and pricing, respecting the need for all parties to return to a normal commercial relationship.”

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