The report from BREE, Resources and Energy Major Projects, showed that in the six months to April no coal project had progressed from the initial stage of being “publicly announced” to the “feasibility” stage – and none had progressed to investment “commitment”
Chief executive of the Australian Coal Association Nikki Williams said: “We have now have entered a different stage of the investment cycle.
“Australian coal companies are responding by making very difficult decisions to reduce employment, investment and confine projects to their existing footprint. Companies are in survival mode in this part of the commodity cycle.”
Governments need to complement industry's efforts to strengthen their competitiveness and productivity, Williams said.
“Australia needs certainty in its policy settings to attract investors and to ensure projects can progress through the investment pipeline without unnecessary regulatory hurdles or sudden taxation changes,” she said.
BREE figures show a further $19 billion of project investment had reverted to the first stage of the investment cycle, or been cancelled altogether and no new coal infrastructure projects had progressed to the “committed” stage.
Four coal infrastructure projects had been deferred or cancelled in the past 12 months: the Abbot Point T4 – T9 project in Queensland; the Port Waratah Coal Services Kooragang Island Terminal T4 at Newcastle; the Yarwun Coal Terminal at Gladstone; and the Balaclava Island Coal Terminal at Gladstone.
BREE forecast both “possible” and “likely” scenarios for the resources and energy industry in the next five years. Under the “likely” scenario, the stock of committed investment has peaked and is projected to revert to near 2007 levels at about $25 billion in 2018.
In contrast, the “possible” scenario shows that investment could peak at around $310 billion next year before declining to about $138 billion in 2018 - more than five times that of the “likely” forecast.
“The ‘possible’ scenario highlights that growth opportunities still lie ahead for the industry, and confirms findings of research that the ACA has commissioned into the status of the coal industry,”
“Despite the possibilities, Australia is competing in a global market against established exporting countries like South Africa, Indonesia, the USA and Canada, as well as emerging energy producers such as Mozambique and Mongolia.
“The future is not guaranteed.”