ACCC proposes to authorise restrictions in a Queensland coal supply agreement

3 November 2006

The Australian Competition and Consumer Commission has issued a draft decision proposing to grant authorisation* to certain restrictions within a coal supply agreement between Tarong Energy Corporation Limited, New Acland Coal Pty Ltd and New Hope Corporation Limited. 

The ACCC proposes to grant authorisation for the life of the agreement.

Under the agreement, Tarong has been granted an option to buy 5.7 million tonnes of coal annually from the New Acland mine in Queensland for 25 years, starting in 2011 and concluding in 2035. 

Tarong will use the coal to fuel its two power stations in the Kingaroy/Nanango region of Queensland.

The agreement contains restrictions which limit the quantity of coal that New Acland can sell each year to parties other than Tarong and limit Tarong's ability to on-sell coal to third parties.

The ACCC understands that the restrictions are intended to ensure that there will be sufficient coal available to Tarong for the life of the agreement. 

Despite the restrictions, any coal produced from the New Acland mine that is in excess of that contracted by Tarong will be available to third parties.

"Public benefits flow from the restrictions by providing Tarong with a secure and efficient long-term supply of coal for its production of electricity", ACCC Chairman, Mr Graeme Samuel, said today. "The ACCC is currently satisfied that the public benefits likely to flow from the restrictions outweigh potential anti-competitive detriment.  Consequently, the ACCC is proposing to grant authorisation".

Related register records

Release number: 
MR 256/06
ACCC Infocentre: 

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