Australia port expansion not enough - coal co boss

NEW YORK, April 22 (Reuters) - Despite planned expansions, the ability of Australian seaports to handle increased coal shipments is unlikely to improve in the next few years, the head of the world's largest coal producer said on Tuesday.

"It's not going to happen," Gregory Boyce, chairman and chief executive of Peabody Energy Corp (BTU.N: Quote, Profile, Research) told Wall Street analysts.

During a conference call to discuss Peabody's first-quarter financial results, Boyce was asked whether recent congestion at Australian ports would be fixed soon. "It depends on what you mean by 'fixed,'" said Boyce.

"We'll see some substantial increases in port capacity, but enough to satisfy demand? They will still be short."

With demand for coal soaring, especially in Asia, companies like Peabody are shipping more from Australia, where the U.S.-based company operates mines. It acquired Australia's Excel Coal Ltd in 2006 for $1.5 billion.

But some seaborne exports have been delayed because of congestion at Australian ports.

Last April, Australia's New South Wales state government approved plans for a new coal export terminal at the port of Newcastle, where severe congestion has hurt exports.

The terminal, planned to start operations in 2009, will add nearly two-thirds to the port's current capacity of 102 million tonnes a year. The NSW government also approved a plan to expand an existing coal terminal at Newcastle.

The announcement came as queues at the port, the world's biggest coal export terminal, reached a record level of 72 ships a month, with an average waiting time of 28 days.