Port Waratah Coal Services has cut the capacity of its T4 coal loader on Kooragang Island by nearly two-thirds to just 25 million tonnes a year.
The cut comes after Port Waratah Coal Services said coal companies advised they no longer expected to ship as much coal, The Newcastle Herald reported.
The announcement comes after Centennial Coal said low prices and high costs had forced it to shut two underground mines, cutting 40 jobs.
PWCS chief executive Hennie du Plooy said he still expected T4 to be built but the original operating date of 2015 has been pushed back to June 2017.
The company is contracted to ship 124.5 million tonnes of coal this year, but will only likely do 108 million as coal companies in the region slow production.
Du Plooy said the company had originally planned to build a capacity of 70million tonnes, but T4’s first stage would now only handle 25 million tonnes.
Despite the cutbacks, Du Plooy said stage one of the project would still cost $3.5 billion and employ about 1500 people in construction jobs.
Liberal MP Tim Owen has ‘‘applauded’’ PWCS’s decision to cut the size of its T4 commitment in the ‘‘current economic climate’’.
In 2009, Port Waratah was given the opportunity to build a new coal loading terminal, known as Terminal 4 (or T4), as part of a wider long term agreement to service the Hunter's growing coal industry.
This was in addition to the two it already operates – the Carrington and Kooragang Coal Terminals. In 2010 the company began planning the export site's development.
The loader has been a contentious issue for Newcastle, drawing criticism from environmental groups, particularly over its dust management claims.
"Anybody who lives in Newcastle knows there is a blanketing of coal dust in many suburbs close to the coal loaders every day of the year, 365 days," Correct Planning and Consultation for Mayfield spokesperson John Hayes told The Newcastle Herald.
"There's a widespread view that spraying water and dust on the coal dust piles doesn't do much to suppress dust."
Du Plooy said the final design of the project would be lodged as a ‘‘preferred project report’’ with the NSW Department of Planning early next year.