| SYDNEY, July 10
SYDNEY, July 10 Australia's powerful coal mining
industry on Sunday warned it was being unfairly singled out
under the country's new carbon emissions trading scheme,
predicting it will lead to job losses and fewer collieries at a
time when buyers are paying top dollar for coal.
Xstrata , one of the country's biggest coal mining
companies, said it was "disappointed at the government's lack of
genuine consultation" before unveiling its plan to slap a carbon
tax of A$23 a tonne on its 500 worst polluters.
Australia, the world's biggest coking coal exporter, relies
on coal to generate 80 percent of its electricity, accounting
for 37 percent of national emissions. Coal is also one of the
nation's top export earners, worth A$46 billion in overseas
sales last year.
Around 40,000 people work in Australian coal mines and a
further 100,000 indirectly, according to sector estimates.
Prime Minister Julia Gillard has announced coal miners,
steel and aluminium manufacturers and other heavy emitters of
carbon gas polluters would pay a A$23 ($24.70) a tonne carbon
tax rising annually to A$25.40, before shifting to market-based
emissions regime in mid-2015.
Australia is the rich world's worst per capita greenhouse
gas emitter due to a heavy reliance on coal-fired power stations
Under the plan, some sectors, including aluminium, zinc
refining and steel making will be given free permits covering
94.5 percent of average industry emissions for the first three
Gillard has also called for the full or part-shut down of
the most emissions intensive electricity generators before 2020,
removing up to 2,000 megawatts of capacity and replace older
coal-fired power stations with cleaner ones.
"The Government has appeased some industries for political
expediency but has ignored the concerns of Australia's biggest
export industry and all of the small business people and
employees who depend on it for their survival," said Ralph
Hillman, chief executive of the Australian Coal Association.
"The government and Greens are imposing costs that none of
our international competitors face, and cannot be justified in
transitioning the Australian industry to a low carbon future,"
said Mitch Hooke, chief executive of the Minerals Council of
"It will simply export investment, jobs, global market share
and emissions offshore."
The coal sector is worried too that a A$1.3 billion
compensation package unveiled by Gillard to help the worst
emissions intensive coal mines adjust is inadequate.
"Our concern is how far that is going to go," said Dylan
Byrne, partner, head of a national sustainability
advisory group for accountancy BDO.
"There are potentially a lot of mines in parts of Australia
that will not see any of that money," Byrne said.
Miners are complaining that the added cost to control
emissions comes in the midst of an up-cycle in the market.
A benchmark price settlement negotiated by Anglo American
was struck at $315 a tonne for the third quarter with
Asian mills, just beneath a record high of $330 agreed in the
second quarter. Australian thermal coal sells for around $122 a
Australia's top coal miners, including BHP Billiton
, Rio Tinto RIO.L> and Peabody Energy
each sell at around the same price.
At the starting point of A$23 a tonne, the tax would
increase the cost of making coal by more than A$1.80 per tonne,
according to the Australian Coal Association.
The leader of the Australian Greens party, Bob Brown, has
infuriated coal miners by saying he would like to see the
industry shut down altogether -- a move mining lobbyists predict
would cost the economy between A$29-billion and A$36-billion a
Alternative energy interests hailed the Gillard plan,
predicting it will lift interest in building more wind farms,
solar power stations and recycling centers.
"We will see solar on steroids," said John Grimes, chief
executive of the Australian Solar Energy Society.
"We are finally penalising pollution and rewarding clean
energy. That will deliver substantial investment in solar power
and position Australia as a solar nation," Grimes said.
Simon Bennison, chief executive officer of the
Association of Mining and Exploration Companies, disagreed:
"Australia`s sovereign risk continues to take a battering, to
the detriment of investment, whilst key trading competitor
countries continue to emit high levels of carbon dioxide and not
incur the same carbon pricing costs as their Australian
counterparts," he said.
(Editing by Ed Davies)