We need to ignore the doom-mongers and continue to build on the great Australian coal industry, taking it to even greater heights, writes federal Minister for Resources and Northern Australia Matt Canavan.
In the 1960s, when Australia was considering expanding coal exports to Japan, the CSIRO advised the government that it should not approve an expansion of coal exports because Australia might run out of coal for its own use.
Fortunately, the CSIRO’s advice was not accepted and coal went on to become our nation’s biggest export, producing decades of wealth, royalties and jobs for Australians.
Australian coal helped Japan bring millions out of poverty and later we did the same for Korea and China.
There remains nearly one billion people around the world without access to electricity, so there is a lot more opportunity for Australian coal exports to expand.
have received access to electricity for the first time yet there remains around 160 million Indians without that necessity. India is already Australia’s biggest market for coking coal but our performance on capturing a share of its growing thermal coal market has not been as impressive.
In 2018, Australia supplied less than 5 per cent of India’s thermal coal imports. The US exported nearly double the amount of thermal coal to India. Given the world’s best thermal coal comes from the Hunter Valley in NSW, that record is not good enough.
We have a big opportunity to turn this around. India’s need for more high-quality thermal coal is likely to grow significantly. While India has lots of its own thermal coal resources, its coals are much less energy rich than Australian coals and typically contain more ash.
In addition, India’s coals are concentrated in the east of the country while much of its industry is in the west. Seaborne coal from Australia has the chance to complement India’s domestic coal industry.
As India becomes more wealthy it will increase its demand for the high-quality coals that produce cleaner environmental outcomes. Over the past decade, India has built 123GW of coal-fired power plants. That is more than five times Australia’s total installed capacity of coal-fired power. India’s newer coal-fired power stations will work better if some of Australia’s high-quality coal is added to the mix.
If we were able to lift our share of India’s thermal coal imports to 25 per cent — the same share we have in the Chinese market — we would lift our export revenues by $3.4 billion, royalty revenue would increase by $240 million and at least 4000 jobs would be created. In other words, we would have more wealth, more jobs and more tax revenue to pay for high-quality services.
That is why it has been so important to secure the Adani investment. Adani is by far the largest Indian investment in Australia to date, but it is just the start. Already since the federal election result gave the Adani project a boost, coal companies in India have expressed renewed investment interest in Australian coal mines, including in NSW.
This week I am in India to discuss this potential. I will proudly sell the wares of Australian coal and try to secure more jobs for Australians.
There were lots of naysayers about Adani, just as there were 50 years ago about Japan. We need to ignore the doom-mongers and continue to build on the great, successful, world-enhancing Australian coal industry and take it to even greater heights.
Matt Canavan is federal Minister for Resources and Northern Australia