The Guardian • Issue #2104

Australian coal: the state of play

  • The Guardian
  • Issue #2104
Chimney stacks.

Photo: FRS Archives – Keeper Collection (freerangestock.com)

The recent Federal Budget has highlighted the significance of the mining industry, especially coal, to the Australian economy. Australia has the third largest reserves of coal in the world, with more than 200 coal deposits. We are the fifth largest producer of coal in the world and the second largest coal exporter. Australia’s recoverable reserves are 74,147 million tonnes (MT) of black coal and 74,039 MT of brown coal.  Australia has 91 operating black coal mines, 3 brown coal mines. Australia exports 54 per cent of the coal in the world. In 2023 exports of coal were worth $127.5 billion (metallurgical $62 billion and thermal $65.5 billion).

The countries with the largest coal production are China 4,126 MT, India 762 MT, Indonesia 614 MT, United States 524 MT, and Australia with 467 MT. Australia is the world’s leading exporter of coking coal. About 70 per cent of coal mined in Australia is exported, mostly to eastern Asia. In 2019-20 Australia exported 390 MT of coal, with 177 MT metallurgical (45 per cent) and 213 MT thermal (55 per cent). Australia is the world’s second largest exporter of thermal coal.

As part of the nation’s commitment to the Paris Agreement, the Australian Labor Party’s coal policy is to reduce greenhouse gas emissions by 43 per cent by 2030, compared to 2005 emissions, and reach net zero by 2050. Thermal coal is a major source of carbon dioxide emissions, with total coal being responsible for 41 per cent (164 million tonnes) of Australia’s emissions, not counting methane and exported coal. In 2021, coal accounted for 64 per cent of Australia’s energy production and 32 per cent of the Total Energy Supply, with 93 per cent consumed by the heat and electricity generation sector and 7 per cent by the industrial sector.

An international climate think tank reported that Australia’s coal mines are emitting twice as much methane as present national estimates. According to the International Energy Agency (IEA), no new coal projects or gas projects can be approved if the world is to achieve net zero emissions by 2050. Yet in February 2024 the Queensland government approved the Whitehaven Coal mine. In April the Australian Conservation Foundation and Mackay Conservation Group sought through the Queensland Land Court  to stop the mine going ahead. Whitehaven will generate 583 million tonnes of climate pollutants during its life.

Australia’ big four banks and other financial institutions are ending their financing of thermal coal by 2030, pledging alignment with the Paris Climate Agreement. Open-cut coal mines generate significant environmental impacts, including modified topography, soil erosion, water pollution, air pollution and acid water drainage.

As part of the Paris Agreement, all of  Australia’s coal power stations will need to close by 2038, with renewable energy capacity needing to triple by 2030 and increase sevenfold by 2050. There are doubts whether Australia will reach these levels under the present rate of conversion to renewables. As an indication of how the world is changing, by 2028 Australia’s export value of lithium and base metals, used in the manufacture of lithium batteries and renewables, will equal the value of Australia’s total coal exports.

Opposition leader Peter Dutton has said he would not pursue the government’s climate target, risking Australia’s membership in the Paris Agreement, which will have political repercussions. The coalition vows to dump Australia’s legally binding climate target to cut emissions by 43 per cent from 2005 levels by 2030. Instead, the LNP claims, implausibly, that it will deploy nuclear energy to reach net zero by 2050. The CSIRO recently reported that the nuclear option is too expensive a path to reach the Paris Accord.

Although the Australian government, and especially the Queensland government, are dependent on coal exports for revenue, the earnings from the coal industry can be phased out. Less than a tenth of export earnings go to Australia directly, about 1 percent of national revenue, the rest goes to the big mining corporations. From the government’s earnings from the fossil fuel industries, around $10 billion a year is paid back in tax subsidies.

As for jobs coal employs half as many people as McDonalds does, and mining companies are doing their best to automate mines.

Australia is phasing out its reliance on coal as a fuel for power stations, and as the world turns to renewables it will decrease coal demand. Coal supplies too few benefits to our nation for the economic and environmental costs involved. Federal and state governments are presently supporting renewables and alternative energy supplies to industries in an attempt to meet the Paris Accord timeline, while supporting new coal mines and gas projects, flying in the face of the same science they mock Dutton for ignoring.

The Communist Party of Australia supports a rapid reduction in carbon emissions and a just transition for all affected workers.

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