A gateway to the second largest city in New South Wales, the Port of Newcastle’s opportunities and challenges reflect its proud history and exciting future. The 792 hectares port has 47 tenants across a diverse range of trades including thermal and metallurgical coal, grain, fertilisers, cement and bulk liquids. The port has a deep 15.2m channel and direct heavy rail access to Sydney, and via the Inland Rail, to Melbourne and Brisbane.
The port has been exporting coal since 1799 with its first shipment to India. While the volume of the port's coal exports are small relative to the domestic production of other countries in Asia, its coal still plays an important role in the Asian seaborne coal market. The calorific content of the coal is high, making it suitable for modern coal fired power plants in markets with low energy independence such as Japan and South Korea, and for blending with lower quality coal from domestic markets in other countries.
But while this higher coal quality remains important for current coal plants, the medium-to-longer-term future is less certain. The Paris Agreement on climate change is rapidly accelerating the transition to cleaner fuel sources in the lead up to 2050.
Senior Manager ESG Port of Newcastle
As the Manager of a 50 per cent shareholding, we are helping to guide the port through its strategic realignment. The board members are providing leadership in understanding and managing ESG issues, for example, by initiating the port’s participation in GRESB and a major consulting project which ranked over 20 potential sustainability capex projects at the port.
The port has invested $A35 million in a new ship unloader for its bulk fertiliser and cement terminal, replacing a 50-year-old piece of equipment and more than tripling the throughput of this industrial terminal.
The port has also commenced a tender process for two mobile harbour cranes to start the process of building a significant container trade at this deepwater port which, given the channel depth already in place for coal vessels, can handle the world’s largest and most fuel efficient container vessels. Overall, the port is planning to spend more than $A300 million over the next five years on diversification projects, and up to $A3 billion over the next 15 years (subject to government approvals on an expanded container terminal).
This strong management engagement, strategic thinking, and responsible governance have put the port’s future on a stable footing. The Strategic Development Plan 2040 outlines the strategic development opportunities and provides a blueprint for future investment and an ambitious diversification strategy.
This includes securing $A515 million in sustainability-linked loans from National Australia Bank, the first financing of its kind to a seaport in Australia. The loans incentivise Port of Newcastle by offering a lower margin on debt if it hits targets across a range of social and environmental metrics, including modern slavery assessments for suppliers, emissions reduction, mental health first aid, diversity and inclusion.
Sustainable management has therefore become an integral part of how the port directs its activities. This means rigorous oversight of the environmental impacts and building a track-record of good performance. Future commitment to science-based targets will build on the reductions in CO2 emissions already achieved.
Partnerships with community groups, customers, partners, and tenants both root the port to its past and nurture its future. Funding and in-kind support have helped local projects thrive and community initiatives are providing lasting social and environmental benefits. For example, Port of Newcastle has recently launched its first Indigenous STEM Scholarship. This will enhance the local region’s capacity to meet future technology-led jobs and support tertiary education pathways for indigenous students.
To bring great focus to the economic opportunities in the region, we recently coordinated a stakeholder day at the University of Newcastle titled “Diversifying NSW’s 2nd City” which included equity and bank representatives, and panel speakers from advanced manufacturers and new energy companies in the region.
All this helps the port to maintain a strong competitive position and remain a vital part of the region’s economic and social infrastructure. Recent independent economic estimates show that it contributes approximately 5,700 direct and indirect jobs in the Lower Hunter region of New South Wales and makes a $A1.5 billion economic contribution.1
Active community engagement leads to better, more widely accepted decisions – especially important in times of change. As part of this, we have seen the benefits of reliable data and transparency.
By being open about longer-term challenges, the port has built support for its agenda in a city that has relied on the coal industry for hundreds of years. Through engagement with initiatives like EcoPorts, a European port sector initiative that seeks to raise awareness on environmental protection and improve environmental management, we have also seen the benefits of sharing information and ideas, helping Australian ports to improve their environmental management.