Australia’s Newcastle port is ordered to cut coal carrying costs for Glencore
PERTH (miningweekly.com) – The Australian Competition and Consumer Commission (ACCC) has ordered the Port of Newcastle Operations (PNO) to reduce its charges for ships carrying coal for mining major Glencore by 20%.
In January 2015, PNO increased the charge for coal ships entering the port by about 40% to A$0.69/t.
In November the following year, Glencore notified the ACCC of a dispute with PNO about the price increase and requested the ACCC to arbitrate.
Since then, PNO has increased the charge to its current 2018 price of $0.76/t.
During the arbitration process, the PNO submitted that the 2018 charge for coal ships entering the port should be increased to A$1.36/t, while Glencore argued the charge should be reduced to A$0.41/t.
The ACCC has now determined that PNO should reduce its current charge for ships entering the port to carry Glencore’s coal to A$0.61/t.
“PNO proposed large increases to the current price, but the ACCC found that a reduction in the price for using the shipping channel was appropriate,” ACCC commissioner Cristina Cifuentes said.
“The ACCC also determined appropriate mechanisms for future price changes, and decided on certain non-price terms and conditions of access where the parties had been unable to reach an agreement.”
The main task for the ACCC was establishing the value of assets used to provide the ‘declared’ shipping channel service. Charges for ships entering the port were then derived from this valuation, Cifuentes said.
A key part of the dispute was whether PNO should be able to charge for dredging of the shipping channel that had been undertaken or funded by users of the port. The ACCC excluded these user-funded amounts from the costs that PNO could recover and determined Glencore should pay a lower price, backdated to 2016.
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