Centennial Coal Confident On Port Capacity After Court Ruling

Centennial Coal Ltd. (CEY.AU) said Thursday it is confident it will have sufficient port capacity for its growing exports despite a court ruling that it must make capacity available to Xstrata PLC (XTA.LN) at the Newcastle Coal Infrastructure Group development.

Centennial gave undertakings to Xstrata with respect to its stake in NCIG at the time of its sale of the Anvil Hill project to the Switzerland-based miner.

Xstrata in turn undertook to assist Centennial to obtain extra port capacity at the existing coal terminal at Newcastle, but after a year of negotiation the parties have been unable to resolve the matter and referred it to the New South Wales Supreme Court.

Centennial said the court has now ruled that the agreement between the two remains on foot for the time being, meaning Centennial is required to make port capacity in NCIG available in the future for the export of material from Anvil Hill, which Xstrata now calls the Mangoola Project.

The Sydney-based miner said it is reviewing the court's decision and considering its position, but has sufficient port capacity for its immediate future.

In the long term, the miner said it is confident it will have sufficient capacity thanks to the implementation of a new port access regime for Newcastle and the potential doubling of the port's capacity over the next few years.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; [e-mail]