Coal news and updates

Glencore’s most senior Australian-based executive says Finkel review recommendations do not provide certainty for investors after a decade of policy failure, and that the Renewable Energy Target needs to be abandoned.

 

The nation should also ensure heavy industry survives by ring-fencing it from climate policy moves and consider delaying Paris emissions reductions commitments to maintain economic prosperity, said Peter Freyberg, the coal chief at the Anglo-Swiss mining and trading giant.

 

In a wideranging talk in Sydney today, Mr Freyberg made a rare criticism of Chief Scientist Alan Finkel’s lauded blueprint for east coast energy security, which includes implementing a clean energy target.

 

“The Finkel review sets out one possible pathway for the national energy market but does little to provide investors with any confidence for future investments,” he told an Australian-British Chamber of Commerce lunch.

 

“There are a number of unanswered questions in terms of the modelling and analysis in the review, such as ‘what is the assumed make-up and nature of Australia’s industrial base — and, just as importantly — what are the policy recommendations around future energy affordability?’”

Key policy initiatives that should be implemented include abolishing the Renewable Energy Target and state-based targets and imposing heavy penalties on electricity generators that exhibit anti-competitive behaviour, he said.

 

Needed was a national energy policy that provided exemptions for heavy industry and set a measured target that did not rule out more efficient coal-fired power.

 

“If heavy industry is to continue operating in Australia, it will have to be exempted as it is currently bearing the brunt of the crisis given the high percentage of energy within its overall cost structure,” Mr Freyberg said.

 

“If that means Australia needs to contemplate a possible delay in meeting its emission reduction targets under the Paris Agreement in order to prioritise the nation’s long-term energy security and economic prosperity, then it’s worthy of further discussion.”

The Sydney-based mining executive took a thinly-veiled swipe at AGL Energy, Australia’s biggest coal power generator, which advertises that it is focused on renewable energy growth and will exit coal between now and 2050.

 

“Those who are talking loudest about eliminating coal are doing very well from it at the moment,” he said.

 

Mr Freyberg said Australia, with coal rivalling iron ore as its biggest export at current prices, should play a leading role in promoting higher-energy, lower-emissions plants and carbon capture and storage.

 

Glencore last week agreed to pay $US1.4 billion for a 49 per cent stake in the Rio Tinto-operated Hunter Valley Operations (HVO) coal complex in NSW as part of a deal with Yancoal Australia, which has agreed to pay $US2.69bn for all of Rio’s Australian coal assets.

 

Mr Freyberg said growing Asian demand for coal inspired the deal.

 

“The economics of coal-based electricity are undeniable and it is one of the few energy sources capable of supplying secure and reliable baseload energy for Asian economies which continue to urbanise and industrialise,” Mr Freyberg said.

 

“This provides our business with an investment opportunity and Glencore is well placed to meet growing coal demand in the Asian economies.”

 

But he took a dig at Adani’s controversial plans to build the Carmichael mine in Queensland’s Galilee Basin.

 

“Our preference is for investing in brownfield opportunities like HVO that produce a high-quality product from an existing mine that is clearly economic, rather than considerably more risky ventures that rely on taxpayer subsidies to get across the line and which will bring on massive volumes of additional coal supply into the market which could undermine existing operations.”

Source: The Australian