ETS will hurt Australia, Xstrata

The proposed trading scheme will cost Australia billions, Xstrata chairman Peter Coates said.

The Federal Government’s proposed Emissions Trading Scheme (ETS) will impose new costs on the Australian minerals sector of up to $2 billion a year, Minerals Council of Australia chairman Peter Coates told the Senate Select Committee on Climate Policy yesterday.

Coates, who is also the Chairman of Xstrata Australia, told the public hearing in Melbourne that coal mining output would be slashed 35% by 2020 if the ETS went ahead as planned.

“In its first five years, the ETS will cost the Australian coal and gold mining sectors $5 billion and $850 million respectively,” he said.

“Producers of other commodities will pay tens of millions of dollars in carbon costs every year.”

According to Coates, the proposed ETS will increase greenhouse gases because production will move to countries that are less energy efficient.

“Australian firms will pay the highest carbon costs in the world,” he said.

“Coal mining will contract in Australia and expand in Indonesia, Russia, Colombia, South Africa, China and elsewhere.

“Xstrata Coal has identified four coal operations which will be at risk as a result of the costs associated with the scheme.”

The Senate Select Committee on Climate Policy will host another public hearing today in Hobart.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.