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Adani’s Carmichael mine will overload coal market, cause global prices to fall, report shows

The ABC’s Stephen Long reports (9.5.17) on details of a confidential report, commissioned by a “leading New South Wales coal producer”, suggesting that production from Adani’s proposed Carmichael coal mine in central Queensland will only serve to weaken the economic case for the project’s approval.

‘A confidential report obtained by the ABC says coal prices will fall significantly and exports from Australia’s biggest coal port will decline if Adani’s giant coal mine in north Queensland goes ahead.

‘The research has come amid a major split in the Labor Party over plans to offer the giant Carmichael mine subsidies and a reduction in mining royalty payments.

‘And it has highlighted deep divisions behind the scenes in the coal industry over the federal and Queensland governments’ support for subsidies for the giant mining project.

‘A key finding of the report was that if Adani’s coal mine in north Queensland went ahead, it would add about $40 million tonnes a year of capacity to the market. And global coal prices would fall by nearly $3.80 a tonne — from a base case consensus forecast of $68.80 a tonne to $65.

‘The report said competition from Adani’s Queensland mine would reduce exports from Australia’s largest coal terminal at the port of Newcastle by 11 to 12 million tonnes a year — equivalent to the output of a Hunter Valley coal mine employing about 1,400 people.

‘Output from Adani’s planned mine would “impact Newcastle supply through influencing the price forecast for thermal coal” with “a bearish price impact of increased new supply from the Carmichael [mine] into the seaborne market”, the report said.’

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