Australian coalmining is entering 'structural decline', reports says

Source: Guardian

Demand from India and China predicted to falter due to higher uptake of renewables and make huge projects commercially unattractive

Coalmining in Australia is entering a “structural decline”, with projects set to become unviable due to unrealistic expectations over the potential to export the fossil fuels to China and India, according to a new report.

The study, by the US-based Institute for Energy Economics and Financial Analysis, suggests that two huge coalmining projects in central Queensland, backed by Indian cash, “are likely to prove uncommercial” due to unfavourable market conditions.

The projects, backed by Adani and GVK, which bought its coal assets from Gina Rinehart in 2011, will attempt to open up vast deposits of coal buried in the Galilee Basin region. Clive Palmer’s China First mine is also slated for completion by 2017, removing a projected 40m tonnes of coal a year for export.

But the IEEFA analysis shows that the wholesale cost of electricity in India, a key export market, is half that of Galilee coal-fired power, making it financially unattractive for the Indian government.

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Read more: http://www.theguardian.com/world/2014/may/05/australian-coal-mining-is-entering-structural-decline-reports-claims