Australia’s climate policy direction threatens coal

Australian producer New Hope has moved closer to reopening its 4.8mn t/yr New Acland coal mine in Queensland, although a change in the federal government may disrupt its plans as pressure for a shift in climate policy threatens coal mining.

The Queensland Coordinator General has issued a change report for New Acland, which New Hope's management hopes provides a clear pathway for the Queensland state government to approve within weeks the reopening of the mine, which shipped its last coal in December 2021 . But the formation of a Labor government in Canberra could at least slow the process, after it was elected on a mandate of reducing carbon emissions.

The Labor federal government will govern with a slim majority in the lower house of parliament, after it reached the key 76 seat majority on 30 June. But it will still be reliant on the Greens-dominated opposition in the upper house, the Senate, to pass legislation. The Greens campaigned to halt all new coal mines in Australia.

Labor may allow the reopening of New Acland before it deals with the complex politics of coal mining in Australia. But in the longer term it is under pressure to do more to deal with climate change from within its own ranks and from the increasing popularity of the Greens and climate concerned independent MP and senators. This is difficult for the Labor party, which is supported by the union movement, including the powerful Construction, Forestry, Maritime, Mining and Energy Union.

Queensland during the federal election swung particularly hard to the Greens, where the party gained three federal lower house seats, putting further pressure on the Labor state government to be cautious about approving new coal mines. The next Queensland state election is not until October 2024, giving some time for the approval of New Acland to be forgotten, should it go ahead.

New Hope has been waiting 15 years for the New Acland mine expansion to 7.5mn t/yr and still needs the Queensland government to issue an environmental approval, mining licence and water licence to proceed.

The firm produced 1.61mn t of coal during February-April, down from 2.05mn t in the previous quarter and 2.29mn t a year earlier, following the closure of New Acland and lower production from its Bengalla mine in New South Wales because of high rainfall and Covid-19 absenteeism, which have affected the whole industry .

The firm reviewed down its production at Bengalla but increased its sales guidance for the year to 31 July, as it runs down stocks to capitalise on a firmer coal price environment.

By Jo Clarke

New Hope coal production (mn t) Feb-Apr &#39;22 Nov &#39;21-Jan &#39;22 Feb-Apr &#39;21 Aug &#39;21-Apr &#39;22 Aug &#39;20-Apr &#39;21 Updated guidance Guidance Queensland 0.03 0.09 0.43 0.40 1.35 0.40 0.22 NSW 1.58 1.96 1.86 5.58 5.41 7.72 8.52 Total 1.61 2.05 2.29 5.98 6.76 8.12 8.73 Total sales 1.85 2.52 2.50 6.98 7.38 9.46 9.09 Source: New Hope

Australian thermal coal prices ($/t)

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