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the future is like the past? « Previous | |Next »
September 11, 2013

The basic assumption of the Coalition's economic policies is that they are geared towards re-fueling a mining boom, particularly in the coal industry. King Coal rules you see, and it is assumed by the Coalition that Australia's future economy will be exactly like the past. The past was premised on the the ever-increasing trajectory of Chinese thermal coal demand resulting in an eternal boom for the Big Miners.

PettyBGreed.jpg Bruce Petty

China's future thermal coal consumption is just going to keep on increasing according to the Coalition. Their rose tinted glasses failed to see the following shifts: China was serious about the need to reduce air pollution; its robust growth in non-fossil fuels including renewable energy; its structural shift from industrial-led growth to a more diversified model. the following shifts: These kind of shifts mean a reduction in demand for coal not an increase in one.

The implication? There is simply not enough demand from other countries, and prices are way too low to justify new coal projects in Australia. So it comes as no surprise that the Xstrata Coal Wandoan Project--- a proposed open-cut thermal coal mine--- has just been scrapped, as well as an associated Balaclava Island coal port near Gladstone and rail line.

The "new reality" in coal markets is that prices have slumped on waning demand and abandoned mining projects in Queensland now exceed $10 billion. This indicates that it’s market forces that ultimately determine the profitability of operations and desirability of investment --not red and green tape.

The $150 billion in investment surging after the Coalition returns to government is just a mirage.

| Posted by Gary Sauer-Thompson at 3:05 PM | | Comments (2)
Comments

Comments

Fascinating.
You think, the sort of people who run Xstrata and other huge conglomerates, what role did they and their ownersand backers play in the farce that's been politics here for some time.

the Queensland state government is putting pressure on Canberra to fast-track approvals for coal mines and the world’s largest coal port.