Magnetic Island North Queensland
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April 9th 2013
Why the port doesn't need to expand

The dredge 'Brisbane' working the Platypus Channel “There is no strong economic basis for the expansion of the Townvsille Port ” says North Queensland Conservation Council (NQCC) Coordinator and Magnetic Island resident, Wendy Tubman.

“The Townsville Port has been operating over the last six years at only 39% of its current capacity. So any plan to double its capacity needs to be based on very reliable forecasts, and frankly these just aren’t there.”

Much of the reasoning for the port expansion rests on the Deloitte Access Economics' (DAE) expectation that, by 2024-25, when the port would reach 33.4mtpa capacity, nearly two-thirds of throughput would be coal (24%), nickel (24%) and magnetite (16.5%).

However, NQCC questions whether these forecasts and expectations are reliable and accurately reflect likely overseas demand for Australian resources and domestic production at future world prices.

“Even DAE, in what could be interpreted as a somewhat lukewarm statement, only describes the Port’s trade forecasts as a ‘reasonable’ basis for planning purposes”, said Ms Tubman.

“Look at the figures: According to DAE ‘Nearly 50% of the non-coal tonnage growth between 2009-10 and 2024-25 (nearly 7.5mtpa) is expected to come from Yabulu more than doubling in size and diversifying into magnetite’.

“But, the report notes that ‘[forecast port] growth is highly dependent on resource projects, which in turn relies on commodity prices remaining at levels that ensure these projects are viable’. It then provides research suggesting that the long run price of iron ore (used as a proxy for magnetite) will fall by around 54%.”

“And the outlook for coal is also fragile” Ms Tubman said. “The report shows a greater than 50% fall in the price of coking coal in the long run.”

“Indeed, Deloitte itself has recently been quoted in the international media as saying, “the main problems that the mining sector faces in all countries is growing costs and uncertainty about demand for coal.... Many investment projects in coal mining have been suspended due to market uncertainty”

“Already, Federal Member for Dawson, George Christensen is reported as having doubts about the proposed coal terminal expansion at Dudgeon Point, suggesting the $12 billion project may no longer be financially viable.

Ms Tubman's claims have yet to be responded to by the Port Authority, whose consultants in the process, AECOM, were contacted over the comments yesterday.

The silting implications of the project has been a common cause of concern across Magnetic Island. In a letter to the government last December, Tourism Operators and Businesses Magnetic Island joined with the Magnetic Island Community Development Association, Magnetic Island Nature Care and Magnetic Island Ratepayers & Residents Association, to express their, "overwhelming concern regarding the detrimental effects of dredging the Platypus and Sea Channels," and "Of greatest concern is the fine silt which is created during maintenance dredging of the channels and its known detrimental effects on the fringing reef communities."

“Given the inevitable environmental damage that will be caused, the community must ask why it is being pushed to accept this port expansion, and demand an independent re-assessment of the need for it” Ms Tubman said.

The Environmental Impact Statement for the project can be seen (here) and the period in which the public can comment on the plans, to the Queensland Government, ends on May 13, and the Federal Government on May 27, 2013. For details see (here)

Story: George Hirst
Photo courtesy of Stuart Kininmonth

Why the port doesn't need to expand
Jenny Stirling
April 9th 2013
Thanks Wendy for your analysis. I don't think the expansion of the port is about trade. I think it is part of strategic military long term planning. The expansion of the port would dovetail nicely into America's expansion back into the Pacific after pulling out of the Middle East to a large extent. And as Greg Sheridan (The Australian) said in 2011: Townsville is one of 3 sites the US navy has it's eyes on. And when you think about where it is positioned in regard to Asia, it makes sickening sense. Darwin and Stirling (WA) were the other 2 places he names and they have been ear marked for such a purpose.

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