The projections in the Statement on the magnitude of the decline in demand for thermal coal are out by decades, say Tim Buckley

Global thermal coal outlook Source: IHS Markit 2020 IHS Markit. Seaborne thermal coal only. Million metric tonnes
Global thermal coal outlook Source: IHS Markit 2020 IHS Markit. Seaborne thermal coal only. Million metric tonnes

Last week the NSW Government released its "Strategic Statement on Coal Exploration and Mining in NSW".

It was described as providing certainty as to where future coal mines may be developed, reducing the impact of mining activity on local communities including air quality and supporting the diversification on mine reliant regional economies are part of the message contained on the statement.

In addition, it talks about supporting the growth of mining for metals that are in increasing demand such as copper, cobalt and rare earths, driven by high technology industries such as the information, energy and transport sectors.

Commenting on the Statement Tim Buckley, an international energy expert, described the Future of Coal Statement as facing in the right direction.

Mr Buckley, director of Energy Finance Studies, South Asia / Australia, Institute of Energy Economics and Financial Analysis (IEEFA), Sydney, told the Argus however, that the future statement is based on holding out hope that India will replace China as a major buyer of Australian thermal coal.

But India is planning to cease the importation of coal in the next three years and develop their own coal mines as well as increase investment in renewable energy infrastructure, he said.

"The projections in the Statement on the magnitude of the decline in demand for thermal coal are out by decades," he said.

"The Upper Hunter's largest open cut coal mine BHP's Mt Arthur is now officially on the market which highlights how company's like BHP are keen to exit the industry. And they are not alone with billions of dollars of investment being pulled from the industry by major investment houses around the world "

Mr Buckley said he completely understood why governments were keen on seeing a continuation of thermal coal production as it was Australia's fifth largest export, a fifth of the $120 billion total in fossil fuel exports for Australia in 2019.

But, the government can no longer ignore the decline in demand, and the impacts this will have, particularly on communities and workers in regions like the Upper Hunter, he said.

To clearly illustrate how quickly things can change he said the drop in coal production year on year in the United States was 26 per cent.

"If that trend continues,which it will, by 2025 the US once the second largest coal producer in the world, will cease coal production. We can already see the dire consequences of this on coal dependent communities in that country.

"It is good to see the state government looking at other mining resources that can boost the economy but those mines are located in western regions of the state which will mean Hunter workers would have to relocate to find jobs or retrain.

"Either way they need the government to seriously invest in diversification programs for coal dependent regions like Singleton otherwise the community will be left high and dry."

Speaking on future job opportunities for our region he said manufacturing including food and fibre production could be one such industry as well as industries which undertake resource processing.

"COVID-19 has brought into question the decades long push for globalisation which means through the use of low cost energy we could see a return of manufacturing," he said.

"But for that to happen we need to build renewable energy infrastructure on a scale that can operate those industries."