Boral Cement fly ash offtake agreement at Tarong Power Station

Summary

Boral Cement and Stanwell Corporation Limited have entered into an Offtake, Operation & Maintenance Agreement (OOMA) pursuant to which Boral Cement will have the exclusive right to take and purchase fly ash from Tarong Power Station (Tarong PS). Under a separate agreement, Boral Cement is designing and constructing a facility for this purpose (Design and Construct Contract, the DCC) and the exclusive rights under the OOMA are conditional on the practical completion of the facility.

Boral Cement submits that it plans to enter the market for the supply of fly ash, taking and supplying Tarong PS fly ash (which it submits is not currently available to the market). Boral Cement submits that there is currently no fly ash facility at Tarong PS that enables fly ash to be taken or sold.  Fly ash from Tarong PS is currently treated as a waste product which is stored on site or at the adjacent Stanwell-owned Meandu Mine. Boral Cement submits the arrangement will increase the supply of fly ash within South East Queensland, enhancing competition in this market as well as downstream markets.

Boral Cement submits that it will be able to satisfy its own fly ash requirements through the OOMA. In addition, Boral Cement submits that it is strongly incentivised to maximise sales to third parties without discrimination, including because its own downstream requirements are below the minimum take or pay volumes contracted under the OMMA.

Boral Cement seeks authorisation to give effect to the OOMA for 10 years commencing from the Offtake Commencement Date (which is when all the conditions have been satisfied or waived and is likely to coincide with the practical completion date under the DCC). Boral Cement anticipates that the Offtake Commencement Date will be 15 March 2021.

The ACCC invites submissions on the application for authorisation by 7 July 2020.

The ACCC will progress its assessment of the application in a timely manner. An indicative timetable is set out below for your information

3 June 2020

Lodgement of application and supporting submission.

16 June 2020

Public consultation process begins.

7 July 2020

Closing date for submissions from interested parties.

July 2020

Applicant responds to issues raised in the public consultation process.

August/September 2020

Draft determination.

September 2020

Public consultation on draft determination including any conference if called.

November 2020

Final determination.

Applicant(s)

  • Boral Cement Limited

Authorisation number(s)

  • AA1000517-1