Consumers to feel impact of Victoria brown coal royalty rate hike – MCA

PERTH (miningweekly.com) – The Minerals Council of Australia (MCA) has slammed plans by the Victorian government to raise the royalty rate for brown coal extracted in the state.

Treasurer Tim Pallas in April 2016 announced the royalty rate increase, which came into effect on January 1 this year. The brown coal industry now has to pay 22.8c for each gigajoule of energy, compared with the previous rate of 7.6c.

The new royalty rate is expected to add A$250-million to the government bottom line over a four-year period.

The MCA has said that Victorians will see the result of this “pernicious decision” as energy suppliers will be forced to increase costs to consumers.

“Through brown coal royalty slugs and bans on conventional and unconventional gas exploration, the government seems intent on making life as difficult as possible for safe, reliable and proven sources of electricity – brown coal and gas,” the MCA’s executive director for the Victorian division, Gavin Lind, said.

“This is happening just at the time Victoria’s generating capacity will be diminished with the closure of the Hazelwood power station and there are rising concerns about the stability and security of Australia’s east coast power generation network.”

Meanwhile, the MCA welcomed comments from Resources and Northern Australia Minister Matt Canavan, who in an interview on Monday expressed his support for coal-fired power stations, saying it was important to keep every operation running.

While Canavan said that renewables played an important part in Australia’s power sector, the importance of coal should not be underestimated.

“In Japan and China right now, they're building ultra-supercritical coal-fired power stations, which will help them meet their Paris climate change targets. They're 40% more efficient in terms of carbon emissions.

“They use our high-quality black coal to generate these outcomes. We shouldn't be turning our back on those options. We don't have those type of plants here in Australia yet, but as our old coal-fired power stations retire, that's certainly something we should look at in my view,” the Minister said.

The MCA's executive director for coal, Greg Evans, noted that coal exports were forecast to reach A$40.6-billion in 2016/17, up more than A$6-billion from the previous year.

“Coal is showing it can compete strongly to deliver reliable energy into the future, and utilising the latest high efficiency low emission generation technologies it can provide affordable, reliable electricity with low emissions - equivalent to gas,” Evans said.