The Australia Institute has released new research showing that the development of Adani and other Galilee basin mines would reduce NSW coal royalties by over $10 billion to 2035.
[Full report in PDF below]
The Institute’s calculations are based on analysis by well-known coal analysts Wood Mackenzie, commissioned by the Port of Newcastle, the world’s largest coal port. Wood Mackenzie estimate the Galilee Basin could reduce coal prices by 25% and cut NSW coal exports by 80 million tonnes per year.
“It’s basic economics that a large new subsidised coal supply will push down prices and push unsubsidised mines out of production,” said report author Rod Campbell.
“It is good to see the NSW coal industry starting to get serious about the threat of taxpayer-funded mines in Queensland, such as the Adani proposal.
“Wood Mackenzie’s 25% price impact estimate is far more pessimistic than The Australia Institute’s earlier analysis which saw Adani and GVK projects reduce coal prices by just 7.5%.
“Yet our estimates were dismissed by NSW Resource Minister Don Harwin, who was ‘comfortable and not concerned’ about the Galilee Basin due to the specifications of NSW coal.
“This analysis should be a wake-up call for Minister Harwin as Wood Mackenzie take energy content into account.
“The NSW Minerals Council is also asleep at the wheel. They talk about Adani providing “huge knock-on export opportunities for NSW coal”. Meanwhile, professional coal analysts think the Galilee Basin will badly hurt NSW miners.
“The NSW coal industry needs to unite and oppose subsidies to Adani and the Galilee Basin. Instead, the Minister would rather fight the opposition and the NSW Minerals Council would rather fight soft targets like farmers and communities.