A DRAMATIC reduction in coal imports has not stopped a North-East port from powering ahead with plans to expand and create jobs.

At the Port of Tyne's Annual General Meeting today, chief executive Andrew Moffat will announce the start of building new facilities to handle, store and transport wood pellet for Lynemouth Power Limited (LPL).

The drop in demand for fossil fuels - led by the Government's decision to phase out coal fired power plants - means that traditional shipments of coals to Newcastle are being replaced by wood pellets.

LPL is converting the power station in South East Northumberland from coal to biomass. The Port of Tyne has secured the agreement to handle, store and transport up to 1.8 million tonnes of wood pellet every year once conversion is complete.

Construction has begun at Tyne Dock in South Shields to build a 75,000 tonne storage facility, three enclosed conveyors and transfer towers, three silos, a rail loading silo and other works. The port is contributing £13 million to this huge project with the majority of the investment being made by LPL.

The port said the project will provide new jobs, and support posts indirectly, both in construction and in operation, for many years to come.

During 2015 the Port invested a record £21m in infrastructure, mainly in completing the £25m extension to the main industrial quay Riverside Quay and providing additional storage space at the port’s car terminals.

In what it dubbed "a challenging year" however, the port saw profit before tax fall from £10m to £6m and turnover slip from £71.5m to £59m.

Nevertheless the value added by the port to the regional economy increased by 27 per cent, to £710m. This was driven by a 30 per cent increase in the number of full-time jobs supported directly or indirectly by the port, which rose to almost 14,500.

The Port’s International Passenger Terminal continued to contribute over £50m to the GVA (gross value added), supporting the travel and tourism sector in particular.

Mr Moffat said: "The fast approaching end of coal imports has been challenging for all UK ports that have been handling this cargo, but the strategy of diversification at the port ensures that we are not reliant on any one sector. We have been at the forefront of developing expertise and facilities to handle the renewable fuel, wood pellet, and I am delighted that LPL have chosen the Port of Tyne as a key partner in this significant development.

“The port has been investing in building a strong, diverse business for almost a decade. We had a challenging year in 2015 which also included restructuring the business, winning new business and ensuring that customer service remained top priority.

“With the ongoing support and commitment of our employees and all of our stakeholders, we look forward to working together to deliver our future strategies to ensure that the Port of Tyne continues to be a vibrant and sustainable port and an important economic driver and enabler for the regional and national economy."