Coal export bottlenecks 'costing millions'

By Michelle Wiese Bockman – www.lloydslistdcn.com.au

The executive in charge of shipping for one of the world’s largest miners has described the situation at Australia’s coal export terminals as "frustrating" and "complex".
"A lot of users are trying to move maximum tonnes over a fairly constrained system,” London-based Rio Tinto Marine general manager Alastair Fischbacher said.
"Whereas in the past there was headroom in the system, it has very quickly been taken up, exposing one constraint after another.
"You fix one thing and it moves up the system to the next point - you get there and it goes straight back to the beginning.
"It is a constant process.”
Rio Tinto Marine shipped 150m tonnes of dry bulk commodities in 2009 and charters up to 60-70 bulk carriers at any one time.
However at a time of booming demand for its coking and thermal coal, and production increases at its Australian mines, Rio Tinto faces record port congestion levels and significant demurrage costs.
The number of ships delayed at Australian ports hit a record of 223 bulk carriers last week, according to Commodore Research & Consultancy.
Most of the 223 were waiting at the east coast coal ports of Dalrymple Bay and Newcastle, with queues now double levels seen a month ago and surpassing the record of 210 at the end of December, according to Commodore Research director Jeffrey Landsberg.
"The latest developments in Australia will see an estimated loss of four to eight million tonnes of Australian coal exports," Landsberg said.
"Coking coal will be most significantly affected, and buyers in Japan and South Korea might soon be forced to import coking coal from the United States and longhaul exporters."
Delays of 40-50 days due to the effects of cyclones and port damage translates to an average demurrage cost of up to $1.4 million for each panamax bulk carrier, based on the first quarter of 2010 average charter rate of $27,400 for Pacific round voyages.
Information about the additional shipping costs to Rio Tinto for its delivered coal sales from Australia was not available but the demurrage bill for its Hunter Valley coal subsidiary Coal & Allied totaled $35.8 million in the financial year to June 30th, 2009.

Source: Lloyd’s List Daily Commercial News - www.lloydslistdcn.com.au