NSW pledges coal support with strategic statement

NEW South Wales resources minister John Barilaro has released the Strategic Statement on Coal Exploration and Mining in NSW to provide clarity for all stakeholders in the industry about the future of the state’s largest export.
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The Strategic Statement on Coal Exploration and Mining in NSW to provide clarity for all stakeholders in the industry about the future of the state’s largest export.

The statement outlines a direction for the coal industry, noting potential areas for future coal exploration and mining, community concerns around coal mining and transitioning to new energy sources.

"Over the coming decades, the coal mining industry will be directly affected by the global transition to different forms of energy generation," Barilaro said.

"However, this transition will not happen overnight.

"During the transition, the NSW government will continue to support the responsible development of our abundant, high quality coal resources for the benefit of the state.

"This Strategic Statement on Coal and Mining in NSW aims to provide greater certainty to explorers, investors, industry stakeholders and communities about the future of coal mining in the state."

Association of Mining and Exploration Companies CEO Warren Pearce said this statement together with the NSW Minerals Strategy provided the path forward for the whole minerals industry and a strategy to responsibly grow minerals investment in NSW.

"The proposed release of new areas for coal exploration through a transparent, competitive tender process should ensure that the best operators are chosen by the NSW government to develop these prospects and may lead to new investment in the state," he said.

"Coal is an important contributor to the NSW economy, providing vital jobs in regional NSW and following the impacts of COVID-19, will help to support the economic recovery of the state."

The statement pledges to support responsible coal production.

"The NSW government is already undertaking reforms to the planning system, some of which will provide greater certainty for coal mining proponents and the broader community," it states.

"This includes amending the Environmental Planning and Assessment Act 1979 to prohibit approval conditions relating to exports.

"Implementation of the findings of the recent review of the Independent Planning Commission will also improve certainty for proponents of major projects."

The NSW government said it would recognise existing industry investment by continuing to consider responsible applications to extend the lives of existing coal mines, and by streamlining the process for exploring new areas and areas adjacent to current mining operations to deliver a better economic return to NSW.

It will also consider releasing a limited number of new areas for coal exploration.

"These will be areas where there are minimal conflicting land uses, where social and environmental impacts can be managed, and where there is significant coal production potential," the statement said.

"New areas identified for coal exploration will be released through a transparent, competitive tender process whenever there are multiple operators who could develop the resource. Release of an area for exploration is not a guarantee of mining. Proponents who may subsequently seek approval to mine will still have to obtain planning approval for mine proposals, which includes consideration of the environmental, economic and social impacts."

The NSW government expects coal exports will only dip 10% from 1 billion tonnes to 900 million tonnes to 2050.

"In the short to medium term, coal mining for export will continue to have an important role to play in NSW," the statement asaid.

"In our immediate region of the world, as elsewhere, there has been a reduction in demand caused by the economic impacts of COVID19.

"However, in the medium term, demand is likely to remain relatively stable. Some developing countries in South East Asia and elsewhere are likely to increase their demand for thermal coal as they seek to provide access to electricity for their citizens."

According to the statement, ending or reducing NSW thermal coal exports while there is still strong long-term global demand wil likely have little or no impact on global carbon emissions.

NSW Minerals Council CEO Stephen Galilee said while it would be important to examine more of the policy details as they became available, the strategy's release was 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," he said.

"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% 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," Galilee said.

"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."

Galilee said the NSW government was yet to provide a convincing energy policy roadmap that guaranteed adequate replacement energy capacity for NSW when those power plants closed. 

"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," he said.

"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."

Greenpeace Australia Pacific spokesman Jonathan Moylan said NSW needed to double its ambition to play its part in limiting global warming to close to 1.5C and that meant rapidly decreasing coal exports, not conducting business as usual.

"Taking stronger action like accelerating the shift to clean and affordable renewable energy to address the causes of climate change will lead to more jobs, cleaner air and less preventable disease," he said.