Every time I go to Canberra it seems that the Australian coal industry is once again being read the last rites. And every time I return, I talk to local Central Queensland coal businesses that have never been busier.
A bunch of reports released in the past week shows that the on-the-ground local knowledge is right, and the “desktop wisdom” of Canberra is wrong again.
First up, the Queensland Government got a Christmas present with royalties from coal doubling this year to over $6 billion. Our mining and coal industries help pay the bills, $6 billion could build 6 world class hospitals in our state, and that is just one year’s revenue from coal. To recover from COVID and pay back the massive debts that governments have accumulated, we will need a strong coal industry.
Next up, the International Energy Agency released its annual coal report. As the head of the IEA reported, “global electricity generation from coal is expected to jump 9 per cent in 2021 to a historic high”, and the report goes on to say that this high demand will likely stay at these levels until 2024, the forecast period for the report.
This experience demonstrates that you should always watch what people say not what they do. A few months ago, at the Glasgow climate conference, countries said they would cut coal use. The naive, woke, western media swallowed the lip service and reported the death of the coal industry. It has only taken a few months for the reality to set in and the IEA now says that “we do not expect (unabated) coal consumption and production to be on the Net Zero by 2050 pathway by 2024.”
Whatever countries say at international climate conferences they go home and do very different things. China’s latest five-year plan shows a growth in coal consumption by 1 percent a year and calls coal “an irreplaceable energy source”. Russia has massive plans to build new coal ports in the Pacific and new rail lines to transport coal to China and India. These investments would directly impact Australia’s ability to take advantage of the record demand for coal.
We do have the inside track though. In volume terms, Australia has over half the coal projects on the books around the world. However, increasing red tape and, the wokeness of our financial sector, threaten our ability to invest in these projects and to create these jobs. Labor’s climate policy, that seeks to tax coal and other mines in a futile effort to cool the planet, would sound a death knell for these opportunities.
And if we do not meet the demand, China, India and other countries will look to Russia instead. This would be not just an economic disaster for Australia but a strategic one too. We should be seeking a stronger relationship with India. Meeting India’s growing energy needs is a crucial way of strengthening that relationship and making it in their interest to keep on friendly terms with us.
Despite the doomsday view of most in Canberra, the latest figures from the Department of Resources shows just how much coal delivers for Australia. Coal is our nation’s second biggest export behind iron ore, and this financial year coal is expected to make a record $90 billion for Australia. And coal has more investment projects on the books (69 in total) than any other commodity, even more than iron ore.
I was in the Hunter Valley a couple of weeks ago at the Bloomfield coal mine. As a joke, I picked up 5 shiny pieces of coal, took a photo and put on social media, “One for each of the kids, Christmas shopping done”. I imagine the kids will be a bit disappointed in their stockings this year but given the record coal prices perhaps they should be happier than they realise.