Queensland coal ports operating under capacity; BHP scraps $5bn terminal plan

BHP Billiton has given up plans to develop a $5 billion coal terminal at the port of Abbot Point on the Queensland coast, the Guardian reports.

The terminal and accompanying rail line would have transferred up to 60 million tonnes of coal per year and was expected to open in 2015.

"Formal relinquishment of the right to develop T2 has now been agreed with North Queensland Bulk and the company will formally withdraw from related regulatory applications," a BHP spokeswoman said, as reported by the Guardian.

The announcement comes in the midst of falling coal prices and after a new report by the Center for Policy Development showed that coal terminals were operating far under capacity – at about 65%.

The report titled Too many ports in a storm, notes that "as the mining investment boom turns to bust, Queensland’s port capacity has already shifted from a shortfall to a surplus."

The authors recommend that no further port approvals be decided before 2020, and that the state adjust its "boom time" policies to ones that are more reflective of the current situation.

However, the Australian federal government just approved the country's largest coal mine – a massive project in the Galilee Basin.  Queensland Resources Council spokesman David Rynne told Australia's ABC news that as supply from these operations comes in, the ports' excess capacity will be absorbed.