WICET weakened further?
WICET not commenting on sale speculation or Caledon administration
Wednesday 17 May 2017
Management at the Wiggins Island Coal Export Terminal (WICET) in Gladstone won’t comment on whether the entering of Caledon Coal into administration this week would have any material impact on the port's operations.
A consortium of banks funded the construction of WICET at the height of the mining boom, after securing “take or pay” contracts with eight Central Queensland coal miners who wanted to use the facility.
Under the arrangement, miners pay to export a set amount of coal through the terminal, irrespective of whether they physically delivered the coal or not.
These fees are then used by WICET to pay down the more than A$1billion worth of debt owed to the banks who funded its construction.
However, the massive downturn in coal prices has meant two of the original eight miners (Cockatoo Coal and Bandanna Energy) have gone bankrupt.
A third; Caledon is teetering on the edge, and Aquila Resources is less than halfway through building its long-awaited Eagle Downs project.
Collectively that is putting enormous pressure on the remaining port users and cutting the revenue coming in for the ports underwriters.
Currently, the only revenue being generated by the WICET terminal is from coal shipped by Glencore, Wesfarmers, New Hope, and Yancoal.
According to speculation by the Australian last month, the creditors of WICET are looking at negotiating with the remaining five users for a new shipping deal that is more sustainable in this post-boom reality, but it would see the banks write-off hundreds of millions of dollars in the process.
However, this might be a more attractive option than putting WICET into administration, which is a rumoured possibility.Another option is selling the facility, but again WICET told Shift Miner they were not commenting on it.