Australian coal mine approved despite climate ruling
Australia's federal government has approved Indian-owned Australian coking coal mining firm Wollongong Coal's plan to restart the Russell Vale Colliery in the Illawarra region of New South Wales (NSW), ending a spate of rejections for projects in the wake of a key climate change court case.
This is the first coal mine approval by the Australian minister for the environment Sussan Ley since the Federal Court of Australia ruled in May that she may breach her duty of care to protect Australian children if she failed to consider the effects of climate change when approving coal mines. She took into account China's capacity to buy coal elsewhere in the world after Beijing disrupted imports of Australian coal when deciding to approve Russell Vale.
The argument that Australian coal mines will simply be replaced by alternate sources if they are not approved, could lead to further approvals including Whitehaven Coal's 10mn t/yr Vickery mine, which was at the centre of the Federal Court ruling in May.
The Russell Vale approval allows Wollongong, which delisted from the Australian Securities Exchange a year ago, to extract 3.7mn t over five years after a previous plan to extract 4.7mn t was rejected. The firm has been under financial pressure for several years and was forced to close the Wongawilli coking coal mine in NSW in April 2019 following safety breaches.
Jindal Steel, which took control of Wollongong from Indian firm Gujarat NRE Coke in 2013, has issued a cash advance of A$550mn ($408mn) to its Australian affiliate. Wollongong had drawn down A$486.8mn as of 30 June 2020.
The NSW Independent Planning Commission last week rejected a plan by South Korean steel producer Posco to build the 3mn t/yr Hume coal project in the Southern Highlands and associated rail link to Port Kembla. It also rejected Australia-based mining firm South32's proposed A$956mn expansion of its Dendrobium coking coal mine in the Illawarra.
Russell Vale, Dendrobium and Hume mines were to use the Port Kembla export terminal near Wollongong, with the future of exports at the terminal threatened by them falling below critical mass.
Argus yesterday assessed the premium hard low-volatile coking coal price at $270/t fob Australia, up from $109.25/t on 10 May.
Argus last assessed high-grade Australian thermal coal at $172.15/t fob Newcastle for NAR 6,000 kcal/kg on 3 September, up from $151.90/t on 30 July and a low of $46.18/t a year ago. It assessed lower-grade coal at $103.99/t fob Newcastle for NAR 5,500 kcal/kg on 3 September, up from $92.93/t on 30 July and $35.04/t a year earlier.
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