Australia approves dredging near Barrier Reef for coal port

SYDNEY Tue Dec 10, 2013 4:52am EST

SYDNEY Dec 10 (Reuters) - Australia approved on Tuesday major dredging work to expand a coal shipping port adjacent to the Great Barrier Reef in a bid to attract more coal mining.

The nod for further dredging at the Abbot Point port follows agreements not to dispose of up to 12 million cubic metres of waste inside the reef and instead use the material for land infill.

The expansion of the coal port would see four new coal terminals constructed to provide extra annual capacity of 120 million tonnes. It would make Abbot Point one of the world's largest coal ports, moving 300 million tonnes annually.

It would also support developments in Australia's coal-rich Bowen, Surat, and Galilee basins, holding some of the world's most abundant coal reserves.

Australia's environment minister Greg Hunt said the amount of dredging allowed had been reduced to 3 million cubic metres from up to 38 million proposed previously to better protect the marine environment.

"Some of the strictest conditions in Australian history have been placed on these projects to ensure that any impacts are avoided, mitigated or offset," Hunt said.

But environmentalists said any dredging will damage the reef.

"Dredging and dumping on this scale is a body blow to an already fragile reef," said Felicity Wishart, Barrier Reef Campaign Director for the Australian Marine Conservation Society.

CHALLENGES DERAIL COAL PLANS

An expansion of port facilities have long been deemed necessary to open up additional coal fields.

Ambitious plans to develop coal mines in the Galilee Basin, which sits in the outback 500 miles from the nearest port, have been derailed by weak coal prices and infrastructure challenges.

Mines under consideration in the Galilee Basin include GVK Power & Infrastructure's 30 million tonne per year Kevin's Corner mine.

GVK is also developing the Alpha Coal mine in a joint venture with billionaire Gina Rinehart's Hancock Prospecting.

Others include China First, a 40-million-tonnes-per-year thermal coal mine, and projects by India's Adani Enterprises and Bandanna Energy.

The government also gave its go-ahead for a liquefied natural gas conversion plant and pipeline on Curtis Island roughly 600 kms (375 miles) south of Abbot Point to support a proposal by Arrow Energy to exploit coal seam gas reserves in the Surat and Bowen Basins.

The Arrow LNG plant, however, is widely expected by analysts and industry insiders to be a prime candidate for scrapping as Royal Dutch Shell, which is partnering the project with PetroChina, tries to rein in investment plans.

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