A new coal export terminal opens for business in QLD, Australia

According to The Australian Financial Review, the Wiggins Island coal export terminal (WICET) in Queensland, Australia is expected to make its first shipment of 73,000 tonnes of coal this week, putting the Queensland terminal open for business three years after construction started.

Export volumes from the terminal, which is owned by eight coal miners, are being closely watched to gauge whether the miners can meet their "take or pay" agreements as thermal coal prices remain near six-year lows.

Aurizon, a publicly listed rail freight company in Australia, has won a contract with miner Caledon Coal to rail coal to Queensland's new Wiggins Island Coal Export Terminal, signalling the terminal will meet at least half its current export forecast.

Aurizon has won an 11-year take-or-pay contract, starting in May, to haul up to 4 million tonnes of coal annually for Caledon from its Cook mine in central Queensland to WICET after a competitive tender.

WICET, which is currently loading its first ship with coal, plans to start shipping coal this week with the aim of exporting about 27 million tonnes annually.

Matthew Spence, analyst at Merrill Lynch, said confirmation that Caledon would use WICET brought "more certainty" to the terminal project.

"It seems that actual volumes, once ramped up, will be at least 17 million tonnes per annum," Mr Spence said.

Aurizon is also believed to have secured haulage contracts with some of WICET's other eight owners to move coal to WICET, including Glencore, Cockatoo, Wesfarmers and Yancoal.

One owner, Cockatoo Coal, was forced to undertake a $125 million equity raising in February after falling coal prices prevented it getting the necessary finance to expand its Baralaba coal mine, while another owner, Bandanna Energy, went into administration in September.

But Glencore, Wesfarmers, Yancoal and Caledon are all confirmed users of WICET, Mr Spence said.

Ref: http://www.afr.com/business/transport/aurizon-contract-win-with-caledon-bodes-well-for-wicet-20150428-1muv3v