Coal reservation scheme fuels fears for BHP’s Mt Arthur mine
Wholesale energy prices reached their highest average level on record last year. Left unchecked, rising wholesale costs should have pushed East Coast utility bills up more than 50 percent by 2024, according to the Treasury Department.
In the email, Lancey said BHP’s biggest concerns about the NSW reservation system included the risk of Mt Arthur’s production costs exceeding the $125 per tonne price cap and the impact this would have on the local rail network and capability of the company could have met its obligations to customers.
“I understand this is a lot to process — but I wanted you to hear it from me first,” he said. “Importantly, nothing is changing at the moment … we are working to understand the full implications and implications.”
Earlier this month, BHP told shareholders that coal mining costs at Mount Arthur would rise to as much as $91 per tonne (US$128) — above the $125 per tonne cap.
“We have written to the NSW government to make our position clear and I am actively working with government officials to convey our concerns personally,” Lancey said.
The NSW government was asked for comment on Sunday.
Earlier, Kean said the intention of the coal reservation plan was to support “a level playing field” between the state’s coal miners who sell in the local market and those who export their products.
NSW coal miners selling domestically are already subject to a temporary cap of $125 per tonne for selling medium grade thermal coal locally.
BHP’s Mt Arthur mine used to produce coal for domestic and international customers in the energy sector, but has since switched to international customers only. In 2020, the company dismantled the 10-kilometer conveyor that supplied coal to AGL Energy’s nearby Bayswater and Liddell coal-fired power plants.
Australian exports of thermal coal – the kind used to generate electricity – are expected to rise more than 60 per cent to more than $75 billion this fiscal year as prices remain at near record levels.
Benchmark prices for high quality thermal coal traded at the Port of Newcastle have more than tripled in the past year, hitting a record high of over $400 per tonne.
However, the longer-term prospects for Australia’s coal exporters remain deeply uncertain. Renewable power generation continues to grow, major commodity companies are increasingly divesting or announcing closures of their coal assets, and financial institutions are pledging not to make new investments in the sector, citing concerns about future demand and global warming.
If the world meets the Paris Agreement’s ultimate goal of 1.5 degrees – the level scientists say is needed to avoid the most catastrophic effects of climate change – Australia’s coal revenues could collapse by up to 80 percent by 2050, according to the Reserve Bank .
https://www.smh.com.au/business/companies/coal-reservation-scheme-stokes-fears-for-bhp-s-mt-arthur-mine-20230129-p5cga4.html?ref=rss&utm_medium=rss&utm_source=rss_business Coal reservation scheme fuels fears for BHP’s Mt Arthur mine