Minerals Council Defends Galilee Basin Coal Profitability
A new report warning against developing the Galilee Basin has been refuted by the Minerals Council of Australia, saying it is “activist-linked academics to try and undermine Australia’s $60 billion coal industry”.
“The activist movement has turned the creation of spurious, pseudo-intellectual reports on the coal industry into high art,” MCA chief executive Brendan Pearson said.
According to Pearson, the report contradicts the official forecasts for coal demand in India, which is stated as surpassing the United States as the second-largest coal consumer over the next two decades. India is currently the world’s third-largest coal consumer.
The report, which was published this week by the Institute for Energy Economics and Financial Analysis, claims falling coal prices and high development costs would make the Galilee projects too expensive to supply India’s electricity demand.
Tim Buckley, who wrote the report, alleges mines in the area would struggle to remain profitable as Australia’s coal industry enters a ‘structural decline.’ Buckley argues India’s unsafe economic and financial situation coupled with financial issues at the country’s coal-fired power station would cause “uncertainty for companies relying on its ability and willingness to import coal, with its association implications for inflation, current account deficits, economic instability and energy security.”
"The financial justification for Galilee Basin Coal is based on flawed economic assumptions, including a reliance on the increasingly uncertain prospect of India being able to continue to finance and economically justify building imported coal-fired power stations," Buckley said.
The report also claims China’s huge investment in renewable energy will be replicated by India on a much smaller scale, and influenced by the pro-solar policies of prime ministerial front-runner Narendra Modi. The cost of electricity generation from solar in India has fallen 65 percent in the last three years.
Premier of Queensland, Campbell Newman has previously said mining the Galilee Basin would be worth $60 billion and create 15,000 jobs. He’s also stated Indian companies see the mining site as a strategic “long-term play.”
"They want coal to come for their thermal power stations day in, day out, week in, week out, month after month, for not 10 years or 20 years or 50 years; they want it to come for 70 to 100 years," Newman said.