Record amount of coal exports as report signals port surplus

GLADSTONE is exporting record amounts of coal through its port, but a new report shows there is too much capacity in Queensland's ports for them to be sustainable.

The Centre for Policy Development report also says the duplication of LNG ports on Curtis Island is dragging down industry competitiveness even before the first gas exports flow.

Gladstone put through 22.47MT of coal to the end of October, which is up 19% on the same four months last year.

Treasurer Tim Nicholls said the government's focus on resources was delivering record levels of coal exports.

"Compared to last year, we are seeing substantially increased exports at our two biggest coal terminals at Gladstone and Dalrymple Bay," he said.

"In October alone Gladstone recorded 5.98 million tonnes, up 17.4% on the previous year."

But report author Laura Eadie suggested that the mining downturn has shifted port capacity from a shortfall to a surplus.

"Coal ports are operating at 65% of capacity, and utilisation may remain below the industry average of 85% if the global thermal coal market shifts to structural oversupply, or Queensland loses market share to cheaper producers, or both," the report read.

It blamed "boom-time policies" for bad economic choices and acknowledged that some coal industry companies now recognise the cost of surplus capacity, including one of the proponents of Gladstone's Wiggins Island Export Coal terminal, Glencore, who are trying to auction off half their 10.9 million tonne capacity as surplus to requirements.

And since end users have to pay for unused capacity, port authorities are insulated from downturns in export volumes, which gives them an incentive to encourage duplication of port development.

"For example, in 2011 Gladstone Ports Corporation encouraged the proposal for 12 to 22 million tonnes of additional capacity at a new Fitzroy Terminal at Port Alma, stating the Port of Gladstone's existing 75 million tonne coal terminal had no further development capacity and was fully committed.

"Yet average export volumes over 2010 to 2012 were only 65 million tonnes. In 2012 Gladstone Ports Corporation revealed plans for a future extra berth to increase capacity to 90 to 100 million tonnes a year."