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Five reasons the Australian government is right to support the coal industry

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World Coal,

New Resources and Energy Minister Josh Frydenberg publicly supports the Australian coal industry. The media and anti-coal activists seem to be surprised at this. But they really shouldn't be - if they knew the contribution that the coal industry makes to Australia and the globally increasing demand for coal. Here is 5 reasons why it is a no-brainer.

1. Economic Contribution

Indisputably mining saved Australia from the recent global economic downturns. Here is why - Exporting coal contributes AUS$40Bn annually to Australia's economy. This represents 12.5% of all of Australia's export revenue. Coal is only second to iron ore in terms of providing export revenue. In fact all mining (excluding oil and gas) makes up 40.6% of Australia's total export revenue.

Mining companies pay taxes and royalties on a huge scale. In fact BHP Billiton alone contributed US$5.3 billion in federal, state and local taxes and royalties in Australia; and that was just in 2015. They also paid tens of millions more than that in additional broader economic and social contributions such as payments to suppliers, wages and employee benefits. That is just one company, so the actual economic contribution to Australia from all coal companies is absolutely staggering.

Australia simply can't afford to turn off coal mining as there is no single or combined industries that can make up the lost revenue. The economy would totally collapse as soon as it did so. We are feeling the pain of a depressed coal market, imagine the hurt if we had no coal industry. The government knows this and its about time the media and the general public became aware of this as well.

2. International Experts

Australia is internationally recognised for having expertise in all areas relating to coal exploration, mining, processing, transporting and utilisation. There are many small, medium and large Australian companies who sell their expertise, services and products domestically and globally. That brings in further revenue and jobs to the Australian economy. These companies and their associated jobs may not survive without a local coal industry to support them and provide an environment to develop and refine their products. New Australian companies would find it very difficult to start their business in an international arena.

Australia's coal expertise could become a significant export commodity itself. Particularly as the developing nations of Africa and Asia turn to coal for their development. It could also mean a significant return to Australia's manufacturing sector. Again providing major economic contributions and job opportunities.

3. China FTA

Australia recently signed the Free Trade Agreement with China. China has one of the largest economy's in the world, is the world's largest consumer of coal and is the world's leading investment in international coal projects.

Australia currently sells a lot of coal to China, even though they have reduced their use. China's coal exports at even half of their current rate still equates to hundreds of millions of t per year. Australia is well placed to continue to export coal to China.

China has overtaken the World bank and USEXIM Bank in financing international coal projects. They are already firmly placed in the developing nations of Africa and Asia. The potential for exporting coal, technology, equipment, infrastructure and expertise to these countries is bigger than huge. If Australia collaborates with China, we could possibly see Australia increasing its export revenue by 30-50%

4. International Investment

We may not like to admit it, but on a global scale the Australian economy is relatively small. That means we need foreign investment to stimulate our growth and infrastructure development. The coal industry has been a major backbone for inviting and securing foreign investment into Australia. These foreign investors have also provided investment in other Australian industries. Foreign investment in Australia is certainly no small sum. In 2014 it was $2.78 trillion.

The alarm bells of "sovereign risk" would clearly be heard around the world. Australia must understand that it must earn any foreign investment and that we are actually competing with other countries to secure it.

5. Positioned To Capitalise On Future Growth

Coal is one of the world's premium energy sources. Coal is one of the most widely utilised minerals in manufacturing. It is estimated that there are approximately 1000 coal fired power plants being planned and developed across the world. The International Energy Agency predicts that thermal coal demand will continue to grow by 2.2% and coking coal by 1.8% each year until at least 2040. Highlighting coal's versatility and a preferred energy source throughout the world.

Australia has a well developed coal industry and infrastructure. It is internationally regarded as having the world's premium expertise, assets and coal deposits. With the predicted global growth of coal over the next 30-40 years; Australia is well positioned to capitalise on it. Australia can't afford to miss out on this opportunity for economic growth, jobs and foreign investment. The simple fact is that there are many countries with coal deposits who are waiting to take that chance from us.


The Australian coal industry contributes much more to Australia than most Australian's actually realise. To suggest that we simply stop one of our strongest assets and highest export earnings is sheer economic suicide. The Australian government understands that. That's why their continued support is a no-brainer.

Now if only we can communicate and educate the Australian population and the media of these facts; Australia could positively move forward to future prosperity, high employment and a higher standard of living.

The other option of course, is to kill the Australian coal industry and watch as the developing nations of Africa and Asia soar past us in terms of foreign investment, development, economic growth and standard of living.

About the author: Russell Taylor is an executive in the mining industry with experience in Australia, Mongolia, India and Indonesia.

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