ONE of the biggest players in the Hunter coal chain – the half-share owner of the Port of Newcastle – has slammed the Federal Government over the proposed $900 million subsidised loan for the Adani coal project and warned that Hunter coal jobs will inevitably disappear if the Queensland project goes ahead.
But port executive Jonathan van Rooyen’s warning that Adani will “unarguably” reduce world coal prices and the volume of coal mined in the Hunter left him on the receiving end of the kind of mining industry criticism usually reserved for environment groups and think tanks like the Australia Institute.
In statements this week Mr van Rooyen, general manager investments for the port’s half-share owner Gardior, said the government would “distort competition and create sovereign risk” by subsidising Adani in a “shrinking world coal market”.
While Prime Minister Malcolm Turnbull, Deputy Prime Minister Barnaby Joyce and others had been “quick to talk about the benefits to North Queensland of this taxpayer support, they have been silent about the costs it would impose on other coal-producing regions”, Mr van Rooyen said.
“There is no avoiding the simple mathematics that if Turnbull succeeds in pushing between 25 million and 60 million tonnes of subsidised new coal into a flat world market the volume of coal mined and exported from the Hunter and Illawarra will decline. As will royalties collected by the NSW government and the number of coal jobs in the Hunter and Illawarra,” he said.
Mr van Rooyen said it was “really my job to speak out against these proposed subsidies” because of the impact on Hunter jobs and the superannuation savings of Australians who invested in Gardior’s The Infrastructure Fund.
There is no avoiding the simple mathematics that if Turnbull succeeds in pushing between 25 million and 60 million tonnes of subsidised new coal into a flat world market the volume of coal mined and exported from the Hunter and Illawarra will decline.
NSW Minerals Council chief executive Stephen Galilee described the port’s half-share owner as “a monopoly infrastructure supplier of port services to the Hunter coal industry, that has increased port charges on customers by 60 per cent or more”.
“There’s no alternative port for the Hunter coal industry to use, so no competition. How does that not damage our coal industry?” Mr Galilee said.
Mining companies Yancoal, BHP, Centennial Coal and New Hope did not respond to Newcastle Herald questions about Mr van Rooyen’s warnings, and the NSW Minerals Council said “none of our member companies have approached Steve (Galilee) with concern about this”.
In 2015 senior Glencore coal division executive Peter Freyberg criticised government subsidies to Adani, saying “Bringing on additional tonnes with the aid of taxpayer money would materially increase the risk to existing coal operations”.
“We are strong believers that if a project can't get away on its economic merits, it shouldn't be developed,” Mr Freyberg said.
Australia Institute economist Rod Campbell first warned about Adani’s global market distortion in 2014, and in a paper this week warned Adani would reduce thermal coal prices by 4 per cent, while the total Galilee Basin coal development could reduce coal prices by nearly 30 per cent.
The subsidised development of the Adani mine represents a threat not just to Newcastle Port but to all mines in the Hunter. With flat world demand, subsidising a large amount of new supply is economic madness.
“The subsidised development of the Adani mine represents a threat not just to Newcastle Port but to all mines in the Hunter. With flat world demand, subsidising a large amount of new supply is economic madness,” Mr Cambpell said.
“It's nice to have the Port onside, but what's really needed is for the NSW Government and NSW Minerals Council to do their jobs and start sticking up for the interests of NSW and its coal industry. Both are too afraid of upsetting their mates in Canberra or Queensland and would prefer to stick their heads in the sand.”
Hunter MP Joel Fitzgibbon described Mr van Rooyen as “absolutely correct” about his warnings about the impact of Adani on the Hunter coal industry.
“Malcolm Turnbull has thrown any economic credibility he may have once had out the window. On a number of fronts he’s sending all the wrong messages to investors,” Mr Fitzgibbon said.
“Adani should be able to stand on its own two feet and any government subsidisation of the project will be a blow to the Hunter region.”