Midlands coal, the wrong project in the wrong market at the wrong time

Several market and physical challenges exist for a new proposed coal development in Tasmania’s southern midlands, according to a new briefing paper released by the Australia Institute Tasmania today.

The company seeking to develop the project, Midland Energy, is looking to raise capital in the U.S.A. where it is claiming coal demand is “rampant” in Asia and increasing globally.

Key findings:

  • Growth in Asian coal demand was high from around 2000 to 2011, but declined between 2013 and 2015
  • Globally, coal demand peaked in 2013
  • Tasmania is further from Asian markets than all other major coal suppliers, such as China, Indonesia, Queensland, New South Wales, Mongolia, Russia and South Africa. 
  • Every shipment of coal from Tasmania to northern Asian ports would incur an extra $100,000 in shipping costs compared to Queensland ports.

“This appears to be the wrong project in the wrong place at the wrong time”, said Leanne Minshull, Director Australia Institute – Tasmania.

“On a per tonne basis, it will be difficult for this mine to compete without further and larger state government subsidies. 

“Any new mines would also compete for water use, an already stretched resources in the Southern Midlands,” Minshull said.

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