Coal resurgence will lead to £50m turnover at port
Oct 3 2008 by Chris Knox, The Journal
ONE of the North East’s major ports is benefiting from the clean-coal revolution and expects to grow its turnover to more than £50m this year.
Port of Tyne, which had revenues of £44m this year, expects to see the amount of overseas coal it handles jump to 3.2 million tonnes this year, up from 2.1m million tonnes in 2007. Despite the rise of alternative fuels such as wind and sea power, the port believes the soaring energy demand in the UK and the recent volatility in the oil and gas markets has led to the re-emergence of coal as one of the country’s main sources of energy.
The port has invested £6m in the last year in equipment to ensure that it will be able to receive even greater quantities next year and believes the energy source will continue to be its main revenue provider over the next five years.
The focus on coal imports is shared by a number of operations in the region, including Port of Blyth, which secured a £3m deal in 2006 to import one million tonnes of coal each year for US company Constellation Energy.
Mike Davison, Port of Tyne’s interim managing director, said: “The UK burns over 53 million tonnes of coal each year and it doesn’t look like that demand is going to tail off any time soon. Coal now makes up the vast majority of our operation, as power stations across the UK have become equipped to produce clean-coal energy.”
The region’s second biggest port now plans to invest £10m to develop 50 acres of land adjacent to Tyne Dock in South Shields to help it cope with the extra demand and is currently deepening the Riverside Quay berth and river channel.
The plans are part of a long-term investment strategy by the port, which has injected £100m in the past decade, including improvements to its fully integrated rail terminal, a number of new warehouses and improvements to the surrounding road network.
The port is also investing in extra handling capacity for its container operations, with the number of containers arriving at the port growing to 29,000 this year, up from 20,000 in 2007.
However, Davison does expect to see the number of cars handled by the port to drop by 94,000 to 500,000 this year, after Nissan decided to split its Spanish exports between Port of Tyne and Amsterdam.
The port received further bad news when ferry operator DFDS withdrew the Bergen route of its Norway operations earlier this year due to competition from low-cost airlines.
However, the port expects to redress the balance with the growing popularity of cruise holidays – the number of ships docking in North Shields will grow by seven to 29 during this year’s season.
This month also sees the return of the iconic QE2 at the port, which is now on its final voyage before becoming a floating hotel in Dubai.
Mr Davison, who is acting as managing director until a replacement is found for the recently retired Keith Wilson, said: “There are areas of our operation that have been badly affected by a number of factors, particularly the number of ferries that are dropping their anchors at our docks.
“We also expect to see a slight drop- off in cruise passengers next year as a result of the credit crunch.
“However, we are continuing to invest in those areas which we see as being the most cash-generative.”
