August 1, 2014
by Anne Miller
Pozzolanic Enterprises – a subsidiary of Cement Australia – has hauled its last load of fly ash from the Tarong power stations, putting to an end a saga during which allegations of uncompetitive behaviour have been tested at times by both the Australian Competition and Consumer Commission and the Federal Court.
Cement Australia’s contract with Stanwell officially wound up last Thursday.
Stanwell has struck a new 10-year deal which gives Sydney-based Coal Reuse Pty Ltd the exclusive right to remove “coal combustion products” (CCPs), ie bottom ash, fly ash, pond ash and cenospheres, from Tarong and Tarong North stations.
These by-products of burning coal have important commercial uses: fly ash is used in the production of ready-mixed concrete; cenospheres are used in paint production.
Pozzolanic has been hauling ash for decades from coal-fired power stations in Queensland.
However, the activity has been dogged with controversy over the years with both competitors and the ACCC at times alleging competition issues.
In March 2011, the ACCC announced it would not give the green light to any new agreement between Pozzolanic and the then-Tarong Energy Corporation and Tarong North Pty Ltd.
One of the problems cited by would-be competitors at that time was that Pozzolanic equipment was connected directly to equipment at the power station, effectively stopping access by other companies.
The ACCC – which at the time was involved with litigation with Pozzolanic over a flyash agreement with Milmerran power station – put the proposed Tarong / Tarong North agreement out to public comment.
However, in August 2011, the ACCC decided to conditionally approve the Pozzolonic agreement with Tarong / Tarong North. This conditional authorisation, which protected conduct which might otherwise be seen to be uncompetitive, expired earlier this year.
In 2013, the Federal Court ruled that certain contractual provisions between Cement Australia and Queensland power stations over the years had lessened competition in the market.
Justice Greenwood said Cement Australia had been able to acquire “virtually all of the concrete-grade fly ash available” and was a “virtual single supplier” in the downstream market, although he ruled that CA was not taking advantage of this power downstream.
A press release from Coal Reuse this week echoed the judge’s ruling: “Coal Reuses’s method will be subject to ‘open market principles’ designed to ensure all parties who access CCPs from Stanwell sites have fair access and commercially reasonable conditions”.
southburnett.com.au understands the presence of Pozzolanic handling equipment on site is again causing controversy, with Coal Reuse unable to have full access until it is dismantled.
This process could take up to three months.
southburnett.com.au has also been told the new Coal Reuse contract could also have ramifications for Nanango-based Envirospheres who have been processing cenospheres from Tarong for industrial use.
Attempts to contact Pozzolanic, Coal Reuse and Envirospheres management for comment have not been successful.