The Stratford Extension Project proposes to extend an existing coal mine in the Gloucester Valley, NSW. The Australia Institute made a submission on the economic assessment of the project to the NSW Planning and Assessment Commission in February 2014. Key points:
· Economic assessment is based on extremely optimistic coal prices of AUD$178 per tonne for semi soft coking coal and AUD$111 per tonne for thermal coal.
· The project is financially marginal and is unlikely to be able to produce according to its estimated schedule.
· Royalty and tax revenue estimates are overstated.
· Employment is overstated.
ERRATUM: Note that The Australia Institute’s submissions have an error relating to how deductions on royalty payments are calculated. The submission erroneously applies the deduction to the royalty payable, rather than the price that the royalty rate is applicable to. Our royalty estimates are therefore understated. All other calculations and estimates are unaffected by this error.