Minister for Resources and Northern Australia Matt Canavan has welcomed a new report which outlines India’s potential as our greatest new thermal coal export market, potentially creating at least 4,000 new direct jobs in regional Australia.
The Coal in India 2019 report, prepared by the Office of the Chief Economist, states that India’s rapidly growing demand for energy presents a golden opportunity for Australia to increase its thermal coal exports to the country.
Minister Canavan said the report provided a detailed examination of recent developments in India’s energy, electricity and mining policies and how they could impact on its future demand for thermal coal.
“As the highly respected author of the India Economic Strategy to 2035 Peter Varghese AO said this week, there is no market in the world that has as much potential for increased trade with Australia as India. This report clearly illustrates that potential,” Minister Canavan said.
“Australia is already a strong and reliable energy partner for India as it continues its rapid development trajectory and brings its people out of poverty. We can grow this relationship further,” he said.
Terming the growth of India’s energy sector “astonishing”, he said that since 2000, more than 500 million people have been ‘switched on’ to electricity, with coal providing around 44 per cent of India’s energy mix. He added that by 2017 there was still 168 million people living in India who had no access to electricity, which is almost seven times the population of Australia.
“If we could lift our thermal coal exports to India to the same market share we currently have with China—to just under 25 per cent of their imports—we could export an additional 37 million tonnes of high energy, low ash thermal coal,” Minister Canavan said.
“That is the equivalent of three or four new Adani Carmichael–sized coal mines. If this investment occurred in the Galilee Basin, it would open up a new, sustainably-sized coal basin in Queensland. Based on current average prices for 2019, this would bring in an extra $3.4 billion in export income and provide around $240 million of additional royalties for state governments to invest in schools, hospitals and roads,” Minister Canavan said.
“In line with that, we’d also be looking at potentially creating upwards of 4,000 new jobs for Australians in the coal sector, with these jobs predominantly being in rural and regional areas. And it is vital to remember that our coal is the best coal in the world—high in energy, low in ash, and therefore has a critical role in helping India reduce its own emissions,” Minister Canavan said.
Minister Canavan said the report found India’s coal consumption was likely to continue increasing over the next decade, and possibly beyond, to meet India’s growing energy needs.
“India is a large coal producer and its domestic production is growing. Australian coal is a perfect complement, not a replacement, for Indian coal. We specialise in a high quality coal that can be easily blended with Indian coal to produce better outcomes for all,” he said.
In 2018, Minister Canavan said, Australia exported 5 million tonnes of thermal coal to India, which was 2.3 per cent of our thermal coal exports, and only 4.5 per cent of India’s thermal coal imports. “We can do better than this. The recent approval of the Adani Carmichael mine could just be the start of a new trade that can bring wealth and jobs to Australia. There is also room for us to boost our exports of metallurgical coal to India as their steel sector continues to grow. We currently export 45.3 million tonnes of metallurgical coal to India, which is around 25 per cent of our total metallurgical coal exports and just over 70 per cent of India’s import needs. India’s desire to improve the safety and productivity of its domestic mining operations also presents an opportunity for Australia’s world class mining equipment, technology and services sector.”
Minister Canavan will be in India till 29 August, where he will meet with resource industry leaders and ministerial counterparts to promote the strengths and potential of Australia’s resources and energy sectors.