Victoria is home to an abundance of brown coal occurring close to the earth’s surface, one of the largest and lowest cost energy sources in the world.
The Victorian Department of Primary Industries (DPI) says there is a proven resource potential of 430 billion tonnes of coal located in the state, which is a significant proportion of the world’s stores of brown coal.
IBISWorld figures show Victoria has a quarter of the world’s brown coal reserves, 90 per cent of which are in the Latrobe Valley.
Recently rising global energy prices and low emissions coal technology have created new, non-power related investment opportunities for the Victorian brown coal industry, according to the DPI.
“More than 80 per cent of Victoria’s resource is located in the Gippsland Basin in South East Victoria, with seams in the Latrobe Valley region containing an estimated measured resource of 65 billion tonnes,” the DPI says.
The potential of Victoria’s brown coal
About half of the brown coal is deemed to be “potentially economic” and the Victorian Government has not yet allocated about 13 billion tonnes of it to potential developers.
“Virtually all the brown coal mined in Australia is extracted from that region and used to generate electricity in power stations located close to the coal mines,” according to IBISWorld.
“Brown coal output in 2010-2011 is expected to be about 70 million tonnes, compared with the 68 million tonnes in 2005-2006.
“The brown coal industry is expected to generate revenue of about $972.6 million in 2010-11, compared with $935 million in 2005-2006.”
The impact of the GFC on brown coal
The brown coal industry was not spared the wrath of the global financial crisis (GFC) when investment and exploration plummeted.
As the world gets back on its feet following the GFC, the importance of harnessing skills and technology for use in brown coal is being realised, as Phil Gurney, chief executive of Brown Coal Innovation Australia told Australian Mining.
“For Victoria, is a low cost resource, the cost of extraction is very low, it’s very close to the surface so we can use open cast methods to access it,” he said.
“The cost of the material is quite low; we’re focused on how to use brown coal in low emission environments, to improve efficiency of energy and carbon capture and storage, finding how to capture emissions from brown coal.
Brown Coal Innovation Australia was created primarily to find practical solutions brown coal mining and usage and Gurney explains that while there are some issues, the industry remains committed to alternate uses.
“We’re just about to announce a new round of funding, and it’s looking at new gasification techniques, new ways of processing coal, longer term things are looking at how we can turn coal to liquids or to other gases, potentially hydrogen, using the fact that you have water in the brown coal and finding new ways of using it in energy generation.
“There’s a whole range of things, we’re also addressing the issue that a lot of things are practical today, but not cost effective.
‘The cost issues with brown coal are that because it has a lot of water vapour in it, you have a lot higher capital equipment costs, when you use more efficient types of coal generation it means higher temperatures and you face other costs issues with the size of the boilers and the cost of some the materials.”
The dire skills shortage across the resource sector is definitely being felt in the brown coal industry, Gurney explained.
“We’re looking at the workplace issues and working on how it will need to change considerably because we will no longer be digging up coal and throwing it into a furnace and burning it,” he told Australian Mining.
“In terms of staffing issues, one problem is that there is that there isn’t a great deal of expertise in brown coal, it hasn’t been invested in up until recently because there hasn’t been such a huge focus on emissions.
“People who can handle it are getting older.
“If we don’t do anything to capture information and transfer it to a new generation we will make the same mistakes, where we bring in machinery from overseas and nobody will know how to use it.”
Earlier in the year, the Australia-Japan High Level Group held discussions on energies and minerals, in a workshop that provided opportunities for business and government from the two countries to discuss, review and advance coal technologies.
Each year, considerable focus is placed on the importance of brown coal, with many speakers highlighting the world-class reserves present in Victoria.
Japanese government leaders from METI, NEDO AND JCoal joined Australian Federal and State government representatives, including the CSIRO.
Representatives were also there from Kawasaki, Mitsubishi Heavy Industries, the Australian Coal Association and Brown Coal Innovation Australia.
The need for advanced use of brown coal and the need to dry the coal prior to using it in high efficiency power generation facilities to lower the CO2 emissions generated during the production of electricity.
A consistent theme throughout the day was the need for more advanced use of brown coal and more specifically, the need to dry the coal prior to its use, particularly when used to lower CO2 emissions generated in the production of electricity.
The focus is on the removal of the water trapped in the brown coal – both physically and chemically – in a cost effective way, which could create a cost-effective gate way for the use of brown coal in conducting and producing electricity.
ECT has developed the Coldry process for the removal of water from brown coal, and says it uses heat to dry the coal to between 10 and 14 per cent.
Environmental Clean Technologies chief executive Kos Galtos highlighted the importance of Coldry as part of the technology recognised by Government and Industry.
“Coldry is being taken very seriously as a solution that can help retain Victoria’s competitive advantage in the national electricity market while offering a front end solution to other technologies looking to create value”
Brown coal seams in the Latrobe are up to 100 metres thick, with multiple seams often giving virtually continuous brown coal thickness of up to 230 metres.
Seams are typically located under only 10-20 metres of overburden.
“Favourable coal to overburden rations (between 0.5:1 and 5:1) in the Latrobe Valley area of the Gippsland Basin indicate a high tonnage of coal for every cubic metre of non-coal material mined,” IBISWorld says.
This combined with the easy digging characteristics of the coal make it some of the lowest-cost coal in the world.
Beyond the Gippsland Basin, other brown coal deposits can be found in the Otway Basin (mainly within the Bachus Marsh, Altona and the Anglesea coalfields) and across the Murray Basin.
Access to all sights is subject to the appropriate exploration and mining licenses.
Brown coal basics are that it is typically low in ash, sulphur, heavy metals and nitrogen, making it very low in impurities by world standards.
However, its high moisture content – which ranges from 48-70 per cent reduces its effective energy content.
Gurney told Australian Mining the focus needs to be on finding alternate used for the resource.
“It’s certainly a fantastic resource and at the rate we’re using it at the moment, while we have a similar amount of resources of black and brown coal, because brown is heavy – up to 60 per cent water – and if you dry it out it can spontaneously combust, so it is difficult to export or transport and that’s why it’s predominantly used on site, that’s why it’s lasting longer,” he said.
“We need to be focused on technology that can use the resource and maybe turn it into an exportable commodity, looking at developments so turn coal to liquids and that sort of thing.”
Image: The Age