Victoria‘s Baillieu Government has begun a strategy to develop the state’s massive brown coal reserves.
According draft cabinet submissions it will look to "increase industry interest in participating in the proposed allocation of brown coal, The Age reports.
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.
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.
Victorian resources minister Michael O’Brien confirmed that it will be "seeking new expressions of interest for new allocations of brown coal.
"The allocations will be based on a competitive tender process with the goal of delivering real benefits to the Latrobe Valley region and Victoria," he said.
"The Victorian government believes that brown coal can, and should, play a key role in our energy future. The allocation process will deliver this.
"Encouraging new investors and the right technologies could deliver a new generation of industry in the Latrobe Valley, boosting the local economy and creating new jobs."
The government will make a formal announcement on the tender process soon.
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.
"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 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."
This latest announcement by the government has drawn serious criticism from environmental groups, which point to brown coal as being the dirtiest coal.
"Given the established link between coal and climate change, green-washing coal is completely inappropriate and unacceptable. It is akin to a taxpayer-funded campaign promoting the tobacco industry,” Environment Victoria’s Mark Wakeham told the Age.
Despite opposition a number of mining companies have already voiced interest in the reserves.
Exergen and Australian Energy Corporation have already put forward their potential interest in gaining access to the region’s brown coal.
In 2009, the state halted brown coal exports to India after a serious voter backlash.
Image: The Age – Justin McManus.