UPDATE: Newcastle Port Coal Capacity To Rise 25% By 2013

Capacity at the world's largest coal export port will increase 25% to 180 million tons a year by 2013, a group leading the upgrade of terminal facilities at the Australian port of Newcastle said Tuesday.

Construction will begin immediately on the second stage of a third export terminal at the port in New South Wales state, the Newcastle Coal Infrastructure Group said in a statement.

That would allow for an expansion to 180 million tons for the entire port, which currently handles 143 million tons per year.

Infrastructure bottlenecks are a major issue for Australian mining companies, particularly in Newcastle's Hunter region and the Bowen Basin in Queensland state.

The second stage will boost capacity at the terminal to 53 million tons a year, NCIG said.

Around 30 million tons a year currently passes through the first stage of NCIG's terminal, which opened in May.

The Carrington and Kooragang terminals operated by Port Waratah Coal Services Ltd. handle 113 million tons per annum, and there are plans to increase capacity to 123.6 million tons in 2012 following the announcement of a A$670 million expansion plan in February.

Michael Egan, NCIG's chairman, said that spending on upgrading the coal infrastructure in the area had helped the Newcastle region cope with the global downturn.

"I've no doubt that one of the reasons this region weathered the effects of the global financial crisis so well is because of this massive infrastructure effort, and that flow-on effect is set to continue for the next two to three years," he said.

NCIG said financing for the A$900 million NCIG construction project had now been agreed, with the project set to employ 600 people over the next two years.

NCIG is a consortium of miners including BHP Billiton Ltd. (BHP.AU), Peabody Energy Corp. (BTU), Centennial Coal Co. Ltd., (CEY.AU), Whitehaven Coal Ltd. (WHC.AU), Yanzhou Coal Mining Co. Ltd. (YZC) subsidiary Yancoal and Noble Group Ltd. (N21.SG) subsidiary Donaldson Coal.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]