The Port of Newcastle (PoN) is moving forward with plans to secure its long-term future by diversifying its revenue sources. Chief Financial Officer Nick Livesey, who joined the port in 2019, stated that several challenges have been resolved, allowing PoN to invest in diversification efforts.
“We were too highly leveraged so we weren’t in a position to invest in our diversification, and there were state government issues (related to terms in the 2013 privatisation of Port Kembla and Port Botany) that prevented us from going into container freight which have now been resolved,” said Livesey. He noted that when he started in May 2019, numerous obstacles needed addressing before investments could begin.
Since its establishment in 1799, PoN has primarily focused on coal exports. Currently, coal accounts for about 95% of the port's volumes and 72% of its revenue. However, as global demand shifts towards renewable energy sources, PoN aims to increase non-coal trade revenue from 28% in 2021 to 50% by 2030.
Three key initiatives are part of this strategy: a deepwater container terminal exceeding $2.4 billion, a clean energy precinct for hydrogen and ammonia production with a transmission capacity of 1.5GW renewable electricity, and an environmental, social, and governance (ESG) strategy.
The proposed container terminal benefits from the availability of 220 hectares of land for development and a deepwater channel capable of accommodating more ship movements than currently utilized. The clean energy precinct aims to establish the Hunter region as Australia's hub for clean energy economy development with federal funding support amounting to $100 million.
Once operational, the hydrogen and ammonia facilities plan to scale up using renewable energy within five years. PoN targets significant emission reductions by 2030: a 55% cut in Scope 1 and Scope 2 emissions based on a baseline year of 2018 and a decrease in Scope 3 emissions by half during the same period.
Financial stability was achieved in 2021 when PoN secured refinancing through a $666 million facility from various banks anchored by a sustainability-linked loan coordinated by NAB.
Livesey emphasized that this financial facility supports diversification rather than coal trade: “So even though the banks are supporting the transition, they might still get some criticism.” He highlighted Newcastle’s economic reliance on PoN's success: “If the port is failing...the whole Hunter region is affected.”
Early outcomes include growth seen across wheat meals/grains exports alongside increased roll-on-roll-off cargoes like vehicles/fuel/project materials such as clean energy components—volumes rose nearly three percent reaching over158 million tonnes while diversified trades accounted for five percent export share throughout last year alone according to recent reports provided directly from CFO himself outlining strategic objectives moving ahead into coming years requiring substantial investments poised eventually boosting non-coal revenues significantly once infrastructure developments become fully operationalized beyond initial stages anticipated within next few short seasons ultimately helping test feasibility regarding new ventures such as constructing Newcastle-specific container terminals rather than solely relying upon alternative locations including Port Kembla sites previously considered among potential options explored earlier discussions internally deliberated among decision-makers tasked overseeing project rollout phases presently underway according latest available updates issued concerning ongoing efforts related larger-scale planning processes currently being executed involving numerous stakeholders collaborating together closely ensuring successful implementation overall according set timelines agreed upon collectively among participants involved partnership agreements established beforehand guaranteeing mutual benefits shared equitably between parties engaged cooperative undertakings designed achieving desired results outlined advance forecasts presented detailing expected returns derived forthcoming endeavors initiated strategically targeted areas identified prior commencement initiatives scheduled commence soon thereafter fulfilling commitments pledged previously toward advancing cause sustainable progress envisioned long term horizon envisioned initially laid out basis collaborative framework employed guiding comprehensive approach 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