October 8, 2018 / 5:53 AM / 8 days ago

Glencore wins cut to coal carrying costs out of Newcastle

MELBOURNE (Reuters) - Australia’s competition regulator said on Monday the Port of Newcastle must reduce its charges for ships entering the port to carry coal for Glencore (GLEN.L), in a big win for the global miner.

FILE PHOTO: The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, November 20, 2012. REUTERS/Arnd Wiegmann/File Photo

The Australian Competition and Consumer Commission said Port of Newcastle Operations Pty Ltd (PNO) should cut its current rate by about 20 percent to A$0.61 (0.32 pounds) per gross tonne, backdated to 2016. The port said it would contest the decision.

“PNO proposed large increases to the current price, but the ACCC found that a reduction in the price for using the shipping channel was appropriate,” ACCC Commissioner Cristina Cifuentes said in a statement.

In the course of the arbitration, Newcastle port told the ACCC that the charge for coal ships entering the port should be increased to $1.36 per tonne for this year. Glencore submitted the charge should be reduced to $0.41 per tonne.

The port said it was disappointed by the decision.

“We will use all legal avenues available to contest the decision. We will be lodging a request for review with the Australian Competition Tribunal,” it said.

Glencore declined to comment.

The Port of Newcastle provides the only commercially viable means of exporting coal from the Hunter Valley region and is jointly owned by China Merchants Port Holdings Co Ltd (0144.HK), which took a stake in February, and Australia’s Infrastructure Fund.

After being privatised in 2014, the port increased the charge for coal ships by around 40 per cent to $0.69 per tonne in January 2015, and later raised the charge to $0.76 per tonne.

Reporting by Melanie Burton; additional reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Joseph Radford and Richard Pullin

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