24 June, 2020
The NSW Government’s Coal Strategy released by the Deputy Premier today is a generally reasonable and balanced approach to the future of the coal industry in NSW.
While it will be important to examine more of the policy details as they become available, the release of the Strategy is a welcome ‘whole of government’ attempt to deliver certainty and consistency for the coal industry, coal mining communities and coal mining families in NSW.
Last year was a record year for NSW coal exports, and notwithstanding the recent COVID-19 related global economic downturn, there is likely to be strong ongoing demand for our high quality export coal for decades, representing significant opportunities for NSW.
The NSW Government’s Coal Strategy confirms this, and provides a high level policy framework for supporting current operations, a process for potential for new development, and an understanding that changes in global coal markets are happening in different ways in different parts of the world, with different impacts on the coal producing regions of NSW.
The NSW Government’s Coal Strategy acknowledges the likely ongoing strong demand for our export coal, and the need for ongoing support for our export coal mining sector, which represents around 85 percent of overall NSW coal production.
The Strategy includes forecasts that current levels of global coal demand will remain relatively flat for the next three decades to 2050, with falls in some markets at least partially offset by increases in others. This is consistent with most conventional views on the global coal demand trajectory, although as the Strategy acknowledges, there are a range of possible scenarios, and the impact of COVID-19 on medium term energy demand trends is also yet to be seen.
The Strategy recognises that our high quality export thermal coal is playing an important role meeting demand that would otherwise be met by lower quality coal from elsewhere, which would cost jobs in NSW while doing nothing to reduce global emissions.
The Strategy also recognises the economic importance of our metallurgical coal production for domestic use here in NSW, as well as for export into key markets around the world.
The Strategy highlights the need to support mining communities impacted by planned closures of domestic coal-fired power plant plants gradually through to 2042. However, the NSW Government is yet to provide a convincing energy policy roadmap that guarantees adequate replacement energy capacity for NSW when these power plants close.
The Strategy clearly differentiates domestic thermal coal production from production for export markets, and notes different changes and potential opportunities for regions that produce thermal coal for export into key markets where demand is likely to be strong for several decades or more.
This is consistent with the NSW Minerals Council’s ongoing support for policies that foster economic diversification in mining regions, given that changes in commodity markets affect different producer regions in different ways and over differing timeframes.
The NSW Minerals Council welcomes the NSW Government’s commitment to a streamlined strategic release process and the potential release of new areas for exploration.
This is good news for regional NSW. Streamlining the strategic release and allocation process will deliver increased investment in our coal export industry that will help strengthen the NSW economy, provide regional jobs, and support regional communities across the state. There are also strong opportunities available from opening up new areas for potential new mines, and the jobs, investment and growth that follows.
The release of the Coal Strategy complements the NSW Government’s existing Minerals Strategy which focuses on the development of non-coal minerals and metals resources, including many of the minerals inputs needed for renewable energy generation and utilisation. The Minerals Strategy was released in early 2019 and its implementation is now well underway.
The NSW Government now has a Coal Strategy and a Minerals Strategy that can together provide a solid overall framework for the long-term future of the resources sector in NSW.
Mining is and will remain an essential industry for NSW. The sector provides around 40,000 direct jobs and supports tens of thousands more jobs in around 7000 mining supplier businesses across the state, and provides NSW with its most valuable export commodities - coal and gold.
With the right government policies, mining will continue to deliver jobs, investment and economic strength to NSW.
Callum Fountain | NSW Minerals Council | cfountain@nswmining.com.au | 0409 758 734 | 02 9274 1419