There’s bad, good and more good news for the mining industry this week.
Why is this bad news? The project is approved to extract 32 Mtpa of run-of-mine coal. Initial plans are for 6 and then 12 Mtpa of saleable thermal coal. Some of this would be burned domestically – IF a powerplant gets built – while the rest will be railed to Richard’s Bay for export.
It would be the first export project in the Waterberg Coalfield, potentially opening up one of the biggest coalfields in the world, a resource of around 75 billion tonnes. Several other companies have plans of similar size.
Richard’s Bay is much closer to India than Australian coal ports. It’s 11 days to Mumbai against 17 days for Abbot Point and 18 for Newcastle. This is a serious threat to any future Australian thermal coal sales to India – if, of course, India doesn’t achieve its goal of eliminating coal imports altogether.
Of course there are plenty of people who don’t think the Boikarabelo mine and the rest of the Waterberg are viable at all. After all, the project was approved in 2011 and couldn’t find finance through the peak of the coal boom. Why worry about it now when even existing mines are being put into care and maintenance?
A key difference now is that Boikarabelo is backed by taxpayers. South African taxpayers are already on the hook through their government’s Industrial Development Corporation and Public Investment Corporation.
Australian taxpayers are being fingered because the proponents, ResGen, are listed on the ASX and are therefore considered Australian. Sure, they may not have any physical presence here – note the South African phone numbers of their “Australian” office. And yeah, they might openly boast about “South Africanising” the company, but that doesn’t seem to matter to Efic or the ASX.
The good news is that there’s plenty the Australian mining industry can do to prevent this massive own goal. Firstly, submissions are open until Wednesday on Efic financing. All companies and communities involved in thermal coal exports should be submitting to Efic that they are putting the mines of New South Wales and Queensland at risk.
Of course it’s very hard to stop coal mines with submissions. Trust me, I’ve tried. So if that doesn’t work, it will be time to put Ian Macfarlane to work in his new role at Queensland Resource Council.
The minister for resources and Northern Australia is Matt Canavan. He’s just said how much he wants mining in the Galilee Basin, so he should be easy to get on board. He’s also a Queenslander in the LNP.
Macfarlane is of course a Queenslander and the former LNP mining minister. If he can’t convince two other Queenslander LNP ministers that Australian taxpayer money shouldn’t be backing coal mines in competing countries, then he’s not up to the job.
The extra bit of good news is that here is something Australia’s mining industry and environmental movement can agree on. Environmentalists don’t want taxpayer subsidies of any coal mines. The coal industry is fine with subsidies, but surely not to their direct competitors.
At last, we can all be friends. Adani and the Australian Conservation Foundation can put aside their differences.
GVK and the Environmental Defenders Office can be on the same side.
Efic was contacted but was unable to respond at the time of publishing.
Rod Campbell is Research Director at The Australia Institute