QLD Mining and Energy Bulletin
Issue link: http://ebook.aprs.com.au/i/50246
BRIGHT FUTURE FOR QUEENSLAND'S With investment and expansion on the rise, the future is looking up for Queensland's CSG industry. Nicholas Newman reports. T he future for the state's coal and coal seam gas (CSG) industries is looking up! Overseas demand for these sectors continues to increase at a steady pace. As a result, there are ambitious plans to invest billions of dollars to dramatically expand capacity. However, the industries' expansion plans face several obstacles that need to be resolved. They include the recently announced carbon tax, skills shortages and local opposition due to environmental problems. Queensland coal Take Queensland's coal sector, the Geological Survey of Queensland estimates that there is more than 30 billion tonnes of black coal remaining in place in the state with much of it located in the Surat and Bowen basins of the interior. Coal is the state's single largest foreign export earner, not surprising when much of Australia's coal is mined in Queensland. In the year 2009/10 the state produced, mostly from open cast pits, 77 MT of thermal coal and 116 MT of coking coal reports the Queensland Resources Outlook – August 2011. However, this year's output is likely to be down, because of the last summer's wet season fl ooding which had a severe impact on mining production and transport networks. This resulted, reports CEO Queensland Resources Council Michael Roche, in only 15% of the state's coalmines being in full production, 60% working with some restrictions and a further 25% not in production. Consequently, Michael Roche estimates that the state's mining sector faced a loss of $2-3 billion in lost sales. The fl oods caused BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. Nevertheless, the state's Premier Anna Bligh expects Queensland to increase its coal production by almost 80% by 2020. However, the Queensland Resources Council makes the claim that the introduction of Prime Minister Julia Gillard's carbon tax could jeopardise expansion plans, resulting in the loss of 3,000 coal-mining jobs directly and as many as 13,000 indirect jobs servicing the industry. [12] 12 QLD Mining and Energy Bulletin Summer 2011/12 Coal markets At present, Queensland provides 20% of the coal traded in international coal markets. In 2009, the State's 52 coalmines earned some $33.2 billion in export revenues and the QRC's Roche estimates that Queensland's State Treasury receives some $8.5 million every day in royalties from coal production. This is not surprising given that in the past year, the price of coking coal has increased by 19% and for thermal by 17%, reports the newly established Bureau of Resources and Energy Economics report on Resources and Energy Statistics – June 2011. Currently, the domestic market consumes 15% of the state's output, mostly for power generation, while the rest is exported to mainly power stations and steel mills in some 47 countries, though the main markets are Japan (36%), Korea (15%) and India (13%). Queensland dominates global metallurgical coal exports with 75% of export tonnage. Expansion plans As part of efforts to meet continuing increases in demand for both metallurgical and thermal coal from Queensland, investors have announced several projects to not only expand existing mines, but also the development of new mines from scratch. Among the proposed mining schemes being examined by the State government for approval are the following proposals: the Galilee Coal Project, Bowen Basin Coal Growth Project and Wandoan Coal Project. Approval of these would increase Queensland's coal industry exporting capacity by 40%. New mines International mining conglomerates such as Anglo American, Rio Tinto and BHP Billiton dominate much of Queensland's coal mining sector. Today, Queensland is seeing the entry of new investors from the newly industrialising countries such as China and India. A case in point is the 20 billion tonnes northern Galilee basin fi eld, which is due to start production in 2014. Currently, only US fi rm, AMCI and Australia's Bandanna Energy have control of 1.2 billion tonnes in reserves, with the rest equally divided between India's GVK and Chinese power station interests CSG OUTLOOK