Coking coal production set to increase in Queensland despite clean energy plan



Key points:

  • Queensland's coal production and export is expected to continue despite its clean energy plan
  • The state is currently processing 17 lease applications for new coal projects
  • Peak Downs' owners are applying to extend the mine's life by more than 90 years


Queensland will remain a "dominant" exporter of metallurgical coal for years to come despite the state government's clean energy push, a Bowen Basin coal producer says.

The Queensland government recently announced a 10-year clean energy plan, in which it committed to dropping its reliance on coal-fired power by 2035.

Bowen Coking Coal executive chairman Nick Jorss said coal production in Queensland showed no signs of slowing down as international demand continued for metallurgical coal, which is used to make steel.

"The Bowen Basin is the dominant exporter of metallurgical coal in the world, and it's got some of the highest quality metallurgical coal in the world," he said.

"Despite the rhetoric, there's an increasing demand for steel, not just for third world countries industrialising ... but also now increasingly for first world countries that want to decarbonise because you need steel to do that."

Bowen Coking Coal has two metallurgical coal mines in central Queensland, with two more coal projects underway in the region as well.

In announcing the $62 billion clean energy plan in September, Premier Annastacia Palaszczuk confirmed export demand for Queensland metallurgical coal would remain strong for some time.

Under the government's 10-year scheme, solar and wind will supply power, but pumped hydro storage technology is to be the driving force.


Coal prices easing

While demand and price for Australia's metallurgical coal rose to record highs earlier this year, they have since eased, with prices forecast to drop further.

According to the federal government's latest Resources and Energy Quarterly report, metallurgical export earnings surged to $66 billion in 2021-22, but were expected to ease to a still high $44 billion by 2023-24.

Australia's metallurgical coal exports were also set to reach 180 million tonnes by 2023-24, up from 171 million tonnes in 2020-21.

Mr Jorss said there were concerns Queensland's renewable energy plan would have a flow-on effect in the metallurgical industry and drive away future investment.

"I think, as a state and as an industry, we need to make a stronger case of the benefits of coal ... up until the point in which we've got something we can transition to," he said.


New mine applications forthcoming

Australia is the world's largest exporter of metallurgical coal, with most of its supplies, or about 170 million tonnes, leaving the country each year.

Between 75 and 80 per cent of the country's thermal coal stocks were also exported, making Australia the second largest thermal coal exporter in the world.

Environmental Advocacy in Central Queensland director Coral Rowston said that while the energy plan was steering the state towards using renewables, the government needed to consider denying applications for new coal mines.

"There is no way that we can meet any of our global [emissions] targets if we keep pulling new stuff out of the ground," Dr Rowston said.

"Let the existing ones run their course and that should see the world through for as long as we need, even despite the [energy] turmoil in Europe."

But applications for new mines, and to expand existing ones, were still forthcoming.

Just a week after the energy plan was released, BM Alliance Coal Operations, a joint venture between BHP and Mitsubishi, applied to expand the mine life of its Peak Downs facility by 93 years.

In its Environmental Protection and Biodiversity Conservation referral to the federal government, the company proposed expanding the mine's area, roughly 30 kilometres south-east of Moranbah, by about 4,000 hectares.

If approved, the mine would not close until 2116.

There are currently 86 coal mines in Queensland, according to the state's Department of Resources.

Of those, 49 are operating, five are in care and maintenance, 19 are in pre-construction, eight in development and five in rehabilitation.

The department confirmed 17 mining lease applications for new coal projects were progressing through assessment, with nine of those before the Land Court of Queensland.

"A further 15 projects are undergoing feasibility, are under construction or preparing for construction," a spokesperson said.

They said every project "must stack up environmentally, financially and socially".

What are scope two emissions?

Rail company Aurizon operates the Central Queensland Coal Network on a 99-year lease from the state government.

It transports coal throughout the region, about 70 per cent of which is metallurgical.

Aurizon said that as the rail network was electric, changes to the grid would reduce "scope two" emissions for trains using it and help the company reach is net-zero emissions targets by 2050.

Scope two emissions are indirect emissions from power generated to run a company's facilities, according to Canberra think-tank the Australia Institute.

But Dr Rowston said within the conversation on Queensland's energy future and the coal industry, more focus needed to be on "scope three" emissions.

Scope three emissions are created in the consumption of a company's goods or services.

"That's our coal that goes to another country or to another industry and is burnt, that's producing emissions, and we don't even take that into account," Dr Rowston said.

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