The Queensland Resources Council (QRC) has welcomed the Northern Australia Infrastructure Facility’s (NAIF) decision to invest in a new metallurgical coal mine near Moranbah in Central Queensland.
The Pembroke Resources-owned Olive Downs Steelmaking Coal Complex in the Bowen Basin will receive a AUS$175 million NAIF loan to kickstart construction of a ‘21st century mine built to 21st century standards’.
QRC Chief, Ian Macfarlane, commended the company’s commitment to building and operating a coal mine to the highest environmental standards and to providing local jobs and supply chain opportunities.
“This is an opportunity for a new metallurgical coal mine to be built in Queensland using the best technology available to proactively manage and reduce emissions and deliver a whole new level of excellence in workplace health and safety,” he said.
“Olive Downs is exactly the type of project the Queensland economy needs to work and earn its way out of COVID-19, and I congratulate the State government for giving this project the chance to be assessed and ultimately approved through all the necessary regulatory channels.
“I also want to acknowledge federal Resources Minister, Keith Pitt, for believing in this project’s potential right from the start.”
Macfarlane said the timing of the opencast mine project – which will offer up to 700 jobs during construction and more than 1000 in peak production – could not be better.
“Metallurgical coal companies are set to benefit from a surge in world steel production, with Australian export volumes expected to increase by around 10% to 2023,” he said.
According to the latest Resources and Energy Quarterly, Australia’s exports of metallurgical coal, which is a necessary ingredient for a majority of the world’s steel producers, are forecast to rise from a 2020 – 20221 low of 171 million t to 186 million t by 2022 – 2023.
The price for metallurgical coal is also set to increase, with the Chief Economist reporting that prices have regained all the losses incurred due to China’s informal ban on Australian coal imports. Australian metallurgical coal export values are forecast to rebound from AUS$22 billion in 2020 – 21 to almost AUS$32 billion by 2022 – 2023.
Macfarlane said Olive Downs is expected to deliver more than AUS$5 billion in royalty payments to the State government over the life of the project.
“Royalties paid by resources companies go straight into the state budget to fund important government services and infrastructure for all Queenslanders, so when the resources sector is doing well, so is Queensland.”