Best News Network

Coal reservation scheme stokes fears for BHP’s Mt Arthur mine

Wholesale energy prices reached their highest average levels on record last year. Left unchecked, surging wholesale costs were expected to have driven an increase of more than 50 per cent to east-coast electricity bills by 2024, according to Treasury.

In the email, Lancey said BHP’s biggest concerns with the NSW reservation scheme included the risk of Mt Arthur’s production costs exceeding the $125-a-tonne price cap, as well as the impacts it may have on the local rail network and the company’s ability to meet its obligations to customers.

“I understand this is a lot to take in – but I wanted you to hear it from me first,” he said. “Importantly, nothing changes right now … we are working to understand the full impacts and implications.”

Earlier this month, BHP told shareholders it expected the cost of producing coal at Mt Arthur to rise to as much as $US91 a tonne ($128) – above the $125-a-tonne cap.

“We have written to the NSW government to make our position clear, and I am actively engaging with government representatives to convey our concerns in person,” Lancey said.

The NSW government was contacted for comment on Sunday.

Previously, Kean has said the intention of the coal reservation plan was to help “even the playing field” between the state’s coal miners selling into the local market and those exporting their product.

NSW coal miners that sell domestically are already subject to a temporary $125-a-tonne cap on local sales of intermediate-grade thermal coal.

BHP’s Mt Arthur mine historically produced coal for domestic and international customers in the energy sector, but has since shifted to international customers only. In 2020, the company dismantled the 10-kilometre conveyor belt that fed coal to AGL Energy’s nearby Bayswater and Liddell coal-fired power stations.

Australian exports of thermal coal – the type used in power generation – are forecast to surge more than 60 per cent this financial year to more than $75 billion, as prices remain at near-record levels.

Loading

Benchmark prices of high-quality thermal coal traded at the Port of Newcastle more than tripled last year to a record high of more than $US400 a tonne.

However, the longer-term outlook for Australia’s coal exporters remains deeply uncertain. Power generation from renewable energy continues to rise, large resources 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 its future demand and global warming.

If the world meets the Paris Agreement’s ultimate aim of 1.5 degrees – the level scientists say is necessary to avoid the most catastrophic effects of climate change – Australia’s coal earnings could collapse by up to 80 per cent by 2050, according to the Reserve Bank.

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.