THE LEADER VOLUME 13 • NUMBER 5
Australia’ s mixed coal signals
Founder and Publisher John Chadwick B. Sc. Min Eng Email: john @ im-mining. com
Editor Paul Moore B. Sc( Hons), M. Sc. Email: paul @ im-mining. com
Editorial Board Professor Malcolm Scoble Robert E. Hallbauer Chair in Mining Engineering., University of BC, Vancouver
Peter Knights Professor and Head of Division of Mining
Stephen Stone West One Management Perth, Western Australia
Dr. Andrew M. Robertson President, Robertson GeoConsultants Vancouver, Canada.
Ed McCord Project Consultant Caterpillar Global Mining, USA
Jason Nitz Fleet Management & Dispatch Superintendent Newmont Mining Corporation, USA
Dr Terry Mudder Managing Director, TIMES Ltd, USA
Simon Tarbutt Consultant, Santiago, Chile
Dr. Mike Daniel Comminution Process Consultant CMD Consulting Pty Ltd
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ISSN 1747-146X
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There is quite a debate going on in Australia about its coal industry – focusing on climate change and the environmental cons of coal power against the availability of cheap coal power and the economic benefits of coking coal, the country’ s second biggest export.
According to IEA Coal Information 2017, Australia was the fourth ranked producer of coal in 2016 with 503 Mt, behind China 3,243 Mt, India 708 Mt and USA 672 Mt.
BMA is Australia’ s largest coal producer and supplier of seaborne metallurgical coal. BMA is owned 50:50 by BHP Billiton and Mitsubishi Development. BMA operates seven Bowen Basin mines and owns and operates the Hay Point Coal Terminal near Mackay. BMC owns and operates two open-pit metallurgical coal mines in the Bowen Basin – South Walker Creek and Poitrel mines. BMC is owned by BHP( 80 %) and Mitsui and Co( 20 %).
BHP expects to produce 41-43 Mt of metallurgical coal according to its FY18 guidance, reduced from 44-46 Mt, reflecting lower volumes now expected at Broadmeadow and Blackwater, and 29-30 Mt of energy coal.
Late last year, BHP did a lot of soul searching in relation to its membership of the US Chamber of Commerce and of the World Coal Association( WCA). BHP also reviewed its view of the new Energy and Climate Change Position of the Minerals Council of Australia( MCA).
BHP undertook a number of engagements with the secretariat of the Chamber and says that“ while the material differences identified by the Review remain at this time, BHP derives a range of benefits from the broader activities of the Chamber, particularly its advocacy on economic issues such as free trade.
“ On the basis of these broader benefits, and in light of the Chamber’ s willingness to engage further on climate and energy issues through an invitation extended to BHP to join its Energy and Environment Committee, BHP has determined to remain a member of the Chamber.
“ BHP will work with the Chamber and its wider membership on the direction of the Chamber’ s climate and energy policy, by actively participating in the Chamber’ s Energy and Environment Committee.”
However, BHP has determined to leave the WCA. Again, it had a number of engagements with the secretariat of the WCA but,“ in light of the material difference identified by the Review and the narrow range of activities of benefit to BHP from membership, BHP has reached a final view that it will cease membership of the WCA.”
According to the Australian Financial Review, BHP was particularly unimpressed with comments made by WCA Chief Executive Benjamin Sporton,“ where he backed the federal government’ s abandonment of its clean energy target and said Australian banks should continue to lend to projects that underpinned high-efficiency, lowemissions coal-fired power stations.”
BHP believes lobby groups such as the WCA and the MCA should be“ technology neutral” in energy policy and
not promote coal over other energy sources.
“ The WCA’ s position has always been clear; we support a balanced approach that integrates climate and energy policy that works towards a low emission future. We believe a balanced approach should not exclude high efficiency, low emissions power generation and carbon capture and storage,” said Sporton.
“ BHP is one of the world’ s largest exporters of coal. We have compared our position on energy and climate policies with those set out in BHP’ s Industry Association Review, and believe there are no material differences between the two. We will continue our important work representing many of the world’ s largest coal producers and allied companies and organisations, who are committed to working with us on a low emission future for coal,” he said.
In March 2018, the MCA released an updated Energy and Climate Policy Position.“ BHP welcomes this revised policy position, which is aligned with BHP’ s approach to climate and energy policy. In particular, from a policy perspective, the updated MCA position addresses the two areas identified as material differences by BHP, relating to the energy trilemma and technology neutrality. In the Review BHP identified a range of broader benefits provided by its membership of the MCA, relating to health and safety, environment, community, workforce and economics. BHP continues to assess the benefits of membership in these areas as high.”
BHP has said it“ will work with the MCA and its members in relation to reflecting the updated Energy and Climate Policy Position in the MCA’ s public advocacy. In this regard, BHP is represented on the Board of the MCA, as well as on its Public Policy Committee and Energy and Climate Committee.”
Given Australia’ s vast resources of economicallymineable coal, and an economy so much supported by mining, one can understand a national interest in maintaining coal output levels. The government has dropped its Renewable Energy Target and is developing a National Energy Guarantee, but there is concern that old coal plants, particularly Liddell, may be closed without due consideration of replacement energy sources. There is a cry for modernisation of Liddell to reduce its emissions and keep it on line for a few more years to avoid an energy shortage, foreseen by some.
Finally, it seems Australian coal cannot catch a break at the moment with railway owner Aurizon threatening to cut 20 Mt of Queensland coking coal export capacity. Both Glencore, the nation’ s biggest coal miner, and Anglo American have spoken out against this.
John Chadwick Founder john @ im-mining. com
MAY 2018 | International Mining 3