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Michael Roche - Queensland Resources Council - Challenges for coal and the Galilee Basin
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Michael Roche - Queensland Resources Council - Challenges for coal and the Galilee Basin


Michael Roche, Chief Executive Officer, Queensland Resources Council delivered this presentation at the Galilee Basin Coal & Energy Conference. …

Michael Roche, Chief Executive Officer, Queensland Resources Council delivered this presentation at the Galilee Basin Coal & Energy Conference.

This conference focuses on developing a new, world scale energy province in Central Queensland. It looks at the significant proposed investment in the Galilee area including coal mining, underground coal gasification, coal seam gas, geothermal, shale and much more, bringing together the wide variety of explorers, project developers, service providers and government representatives under the one roof. The event is run in conjunction with the Australian Journal of Mining (AJM).

For more information about the event, please visit the conference website: http://www.informa.com.au/galileebasin2013

Published in Technology , Business
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  • 1. Galilee  Basin  Coal  and  Energy  Conference   25  November  2013   Challenges  for  coal  and  the  Galilee  Basin   Michael  Roche   Chief  Execu0ve   1  
  • 2. Who is the Queensland Resources Council? > The Queensland Resources Council (QRC) is a not-for-profit peak industry association representing the commercial developers of Queensland’s minerals and energy resources > 87 full members – explorers, miners, mineral processors, site contractors, oil and gas producers, electricity generators, including strong Galilee representation > 183 service members - providers of goods or services to the sector > QRC celebrating 10th anniversary this month > Board comprises coal, minerals, oil & gas, energy, contractors and explorers > New President Rob Neale, CEO of New Hope Group 2  
  • 3. Aberdare Collieries Civil Mining and Construction Jindal Steel & Power John Holland QGC Rio Tinto Alcan Adani Mining Allegiance Coal Clean Energy Australasia Coalbank Altona Mining Ambre Energy Cockatoo Coal ConocoPhillips Australia Leighton Contractors Liberty Resources Rio Tinto Coal Australia Santos Linc Energy Lucas Group Macmahon Holdings Senex Energy Shell Development (Aust) Sibelco Australia Anglo American Anglo American Exploration CuDeco Downer EDI Mining Aquila Resources Areva Resources Australia Arrow Energy Bandanna Energy Eagle Downs Coal Management MacMines Austasia Ensham Resources Mastermyne Mega Uranium ERM Power Metallica Minerals Evolution Mining Beach Energy BHP Billiton Cannington Exco Resources Glencore - Coal BHP Billiton Mitsubishi Alliance Blackwood Corporation Caledon Coal Glencore - Copper Glencore - Zinc Golding Contractors Cape Alumina Cape Flattery Silica Mines Guildford Coal GVK Carabella Resources Carbon Energy Inova Resources International Coal Carpentaria Gold Cement Australia Investigator Resources Isaac Plains Coal Mgt MetroCoal Tata Steel Resources Australia Millmerran Power Management Thiess Minerals and Metals Group U&D Mining Mitsubishi Development Vale New Hope Group Vital Metals Norton Gold Fields Watpac Civil & Mining Origin Energy Wesfarmers Resources OZ Uranium Westside Corporation Paladin Energy Whitehaven Coal Peabody Energy Yancoal Australia QCoal Jellinbah Resources QER Sojitz Coal Mining Stanmore Coal Summit Resources Superior Coal 87 full members 183 service members 38 associate members     3  
  • 4. Economic  contribu,on  of  the  Queensland  resources  sector   In  2012-­‐13  (directly  and  indirectly):     A  record  $38  billion  in  wages  and  salaries  paid   and  purchases  from  Qld  companies       Reduced  spend  by  coal  offset  by  increased   spend  by  CSG/LNG  (but  coal  s0ll  $20  billion)     One  in  every  four  dollars  Queensland-­‐wide     One  in  five  jobs  Queensland-­‐wide       www.queenslandeconomy.com.au 4  
  • 5. 5  
  • 6. 6  
  • 7. www.woodmac.com Seaborne thermal coal – supply and demand (2013-2030) 2,000 1,600 1,400 1,200 1,000 800 600 400 Australia South Africa Indonesia USA Colombia Other 2029 2027 2025 2023 2021 2019 2017 0 2015 200 2013 Seaborne export production and import demand (Mt) 1,800 Russia Demand Source:  Wood  Mackenzie   © Wood Mackenzie 7 Strategy with substance
  • 8. This  phase  of  Australian  resource  investment  has  peaked   120 300 100 250 80 200 60 150 40 100 20 50 $b number number  (left  axis) value  (right  axis) Source: Bureau of Resources and Energy Economics 8  
  • 9. Strong  supply  response  from  Qld  coal     2010/11 = 162 mt 2011/12 = 165 mt 2012/13 = 180 mt 2013/14 annualised = 205 mt -  Soaking up latent capacity looking likely 9  
  • 10. QLD coal mines have become uncompetitive Source: Port Jackson Partners (2012), Regaining our competitive edge in minerals resources. Minerals Council of Australia – Minerals Week presentation, 30 May 2012 10  
  • 11. COAL  far  from  finished     Daunia  (opened  Sept  2013)     Kestrel,  Broadmeadow  expansions   now  opera0ng     Caval  Ridge  Grosvenor,  Eagle  Downs   under  construc0on     Springsure  Creek  strengthening     …  and  Galilee  Basin  projects  keep   progressing   11  
  • 12. Galilee  Basin  mines  of  scale  and  sophis,ca,on  –  GVK  has  all  State  and   Federal  approvals  except  Abbot  Point  dredging.  Land  Court  objec,on.   Energy-­‐ starved   India  =   GVK,   Adani   Galilee   front   runners   12  
  • 13. Galilee  Basin  mines  of  scale  and  sophis,ca,on  –  Adani’s  supplementary  EIS   out  for  public  comment  un,l  20  Dec.     13  
  • 14. Galilee Basin Development Strategy – Will It Help? > 10 initiatives to provide lower upfront costs, project and process certainty. > No funding commitment but possible ‘ramp-up to full royalty’ – needs to be substantial to make a difference to project NPVs. > Payoff for tax payers is 30 year projects employing thousands of people and royalty stream that will pay off government investment many times over > Possible declaration of GBSDA in early 2014 to enable compulsory land acquisition > Reserve Abbot Point T2 terminal for ‘credible first mover’ > Water allocation from Burdekin at prices intended to facilitate local supply and management solutions > Establish multi-user transmission line corridors 14  
  • 15. A  holiday  from  Queensland  coal’s  high  effec,ve  tax  rate?   15  
  • 16. Federal Election Initiatives Also Important to Galilee Basin > Promised axing of world’s highest carbon tax – probably by new Senate after 1 July 2014. Galilee coals not particularly gassy, but policy will help at the margin. > Promised end of MRRT – will also await new Senate. Large administrative savings. Treasurer Hockey has to avoid temptation to tinker with resource sector taxation eg fuel tax credits. > One stop shop for environmental approvals: need to deliver progressive streamlining over next 10 months, with full operation by September 2014 > Exploration Investor Tax Incentive ($100m over 4 years) may assist with current dire capital raising environment 16  
  • 17. Explora,on   performance     It’s  a  struggle   17  
  • 18. Statewide support for mining & resources high 79% TOTAL SUPPORT 82% 33% Strongly support 35% 16% TOTAL OPPOSE Strongly oppose Don’t know / No opinion 14% 5% 5% 5% 4% Total 2012 Total 2013 18
  • 19. Industries under attack >  Orchestrated global/domestic ENGO campaign aimed at shutting Queensland coal industry down by exaggerating dangers to Great Barrier Reef from shipping and port development. Big focus on blocking Galilee Basin projects. >  Documented threats to reef are (a) Crown of Thorns starfish (b) nutrient run-off from towns and agriculture (c) climate change/storms >  Strategies: Colonise genuine community groups and influence concerns, delay coal projects, then undermine the social licence of the industry; finally shaking confidence of investment community to stop growth 19  
  • 20.             www.qrc.org.au   23  
  • 21. 24  
  • 22. Walking  the  talk   Mackay,  Bowen,   Townsville,  Cairns,   Rockhampton,   Canberra,  London,   Paris,  Berlin   25  
  • 23. Reform of objections and appeals process urgently needed > Resources  projects  should  not  be  at  a  procedural  disadvantage  rela0ve  to  other   types  of  development  projects  by  having  greater  unnecessary  ‘greentape’  imposed     > The  systema0c  abuse  of  appeal  process  by  certain  organisa0ons  needs  to  be   addressed  by  considering  the  ‘standing’  for  objectors,  based  on  exis0ng  legal   requirements  in  the  Environmental  Protec/on  Act  1994.     > Need  a  single  integrated  objec0ons  and  appeal  process.   > Timeframes  imposed  on  the  Land  Court  for  decisions,  which  should  be  monitored   and  reported  on  annually.   >   Establish  a  specialist  resources  jurisdic0on  for  the  Land  Court  to  ensure  resource   projects  are  not  held  up  by  surges  in  the  Court’s  workload.   26  
  • 24. Galilee  Basin  Coal  and  Energy  Conference   25  November  2013   Challenges  for  coal  and  the  Galilee  Basin   Michael  Roche   Chief  Execu0ve   27