Australia has been hit by a price spike that has pushed coal export prices higher and left the industry in limbo.
The government announced a $1bn investment in new coal export terminals and the closure of two old ones.
The Government announced the closure last week of two coal export plants, one of which was in the middle of its annual production season.
The closure of the two coal mines at the Nga Taonga mine in Victoria and the Ngasanin copper mine in Western Australia also meant the closure and closing of the other two.
The Nga Takah, located at the edge of the Hunter Valley, is the largest of the three mines, and was producing coal at around 7 per cent capacity when the mine shut in January.
Coal exports were a key part of the country’s $1tn-a-year coal-fired power generation industry, and the Government is seeking to reduce reliance on the industry.
It has also committed $300m to the National Coal Block Grant Scheme.
However, the closures of the coal mines and the closures in the Hunter and Western Australia have had a significant impact on coal production in Australia.
As a result, the coal industry has been struggling to find new sources of coal, and it has struggled to meet the growing demand for more coal in Australia’s energy mix.
Key points:Coal production in the country has fallen by 20 per cent since 2020, with mines being shut down in the northern Hunter Valley (file picture)Coal producers in the Northern Territory are being forced to cut production, but the industry is struggling to compete with the coal imports, according to the Australian Coal Association The Australian Coal Alliance (ACAA) said it was “confident” the closure in the NT was a result of “unprecedented demand for the supply of coal”, but said it would be up to the industry to ensure it can continue to export coal.
“The Government must ensure that coal exports are not forced to make this decision without a long-term solution for the industry, which will mean no new mines and no new coal exports in the near future,” the ACAA said.
“It is imperative that the Government take the lead in developing a long term solution to address the crisis.”
In the meantime, the industry has had to rely on imports.
Coal imports have been down by up to 30 per cent over the past five years, and Australia has not been exporting any new coal, the Australian Energy Market Operator (AEMO) said.
But, the AEMO’s report on coal imports said the country still had more than 200,000 tonnes of coal in storage, and that most of it had been moved to the open market to compete for supply.
It is also facing increased competition from imports.
A number of countries, including China, India and South Korea, have announced their intentions to export more coal, AEMOs chief executive officer, David Williams, said.
“The United States and China are the leading suppliers of coal to Australia, and we are seeing a number of other countries move into that role,” he said.
“We are looking at increased coal exports from these countries in the short term as well as the longer term.
In terms of the United States, they are looking to export up to 1.3 million tonnes of CO2-emitting coal per year.
So, in a sense, we are already exporting coal in the U.S.”
The Australian Energy Regulator said it had not seen a lot of changes to coal imports over the year, and said the industry was still struggling to cope with the rising demand for coal.
It said there was an “unusually high level of demand” for coal and coal products in Australia in 2017, with demand rising by more than 7 per,000 tonne over the course of the year.
Australia’s new National Energy Policy will require the closure or closure of coal mines in the future, and will include a commitment to reducing imports of coal and other fossil fuels, the Government said in a statement.
This is a developing story.
Check back for updates.
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