In April The Newcastle Herald published a table and a map showing ownership details for the Hunter's coal mines ('Future of Newcastle coal industry after renewable energy transition", Herald 3/4). The table and the map were the centrepiece in an article by journalists Donna Page and Gabriel Fowler. Their article is part of the Herald's Power and the Passion series on the future of the region's coal and power industries. The series is a finalist, deservedly, in the prestigious Kennedy Awards, the newspaper industry's annual showpiece of journalism excellence.
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I have kept a copy of the table and the map on my desk. It is now covered in notes and markings. It looks like the one-pager a diligent student might take into an open-book exam.
This week, I took to it with a highlighter and marked every overseas-owned coal company and coal mine. The page is now a yellow mess.
My curiosity about the extent of overseas ownership of Hunter mining was prompted by the promotional advertising campaign on television launched by Glencore, the $180 billion Anglo-Swiss colossus, the biggest miner on the planet. I had seen a few Glencore ads on local TV, and then saw them regularly in Sydney last week. I was struck by the similarity in the tone of the ads with those launched by the big miners in 2010 in response to plans by the Labor government to impose a super-profits tax on Australian mining ventures.
Back then, though, the campaign was led by big Australian-owned mining companies - BHP, Rio Tinto, Fortescue and Gina Rinehart's Hancock Prospecting P/L - and referred predominantly to the mining of metal ores, rather than coal. Those companies' claims that their profits were re-invested in Australia, and returned to Australian shareholders, contained large slabs of truth.
Glencore and its fellow foreign coal operators struggle to mount a similar claim.
Donna Page's and Gabriel Fowler's table explains why. The table lists the owners of the Hunter's 23 coal mines and the number of workers at each site. The largest is BHP's Mt Arthur mine, with 2000 workers. BHP has announced its intention to cease operations at Mt Arthur by 2030. Presumably, the mine will then shut.
Of the other 22 mines, 18 are foreign-owned. Two companies dominate, the Chinese-owned Yancoal operates four pits. But Yancoal is kid brother to Glencore, which operates seven pits and jointly runs another, United Wambo, with US giant Peabody. The other foreign owners are Banpu from Thailand (which owns Centennial coal, the operator of Mandalong and Myuna undergrounds), the Salim Group from Indonesia (Mt Pleasant), and Japan's Idemitsu (Muswellbrook Coal).
Two companies dominate. The Chinese-owned Yancoal operates four pits. But Yancoal is kid brother to Glencore, which operates seven pits and jointly runs another
Beyond BHP, Australian ownership of Hunter mines is a thin list. The New Hope Group, a listed company, big in Queensland, operates a single pit, Bengalla. Bloomfield Collieries is a family company with mines at Ashtonfield and Rixs Creek. The unlisted Sunset Power International P/L controls the Chain Valley mine, although it does so under the Delta Coal moniker.
Right now, coal prices are at record levels, due to the effect on oil and gas supplies of Russia's invasion of Ukraine. A super-profits tax would have steered a fair share of these raised coal revenues to the public purse.
Sure, high prices mean mining royalties go up. The NSW Minerals Council predicts a $11 billion windfall to the NSW government in the next four years. Yet, at a royalty rate for open-cut coal at 8.2 per cent of the value of coal recovered, the Minerals Council must be expecting foreign earnings from NSW coal over the four-year period to be north of $100 billion. This is monster stuff.
The Queensland government wants increases in mining royalties so its citizens get a fairer share of that state's surging coal revenues. The mining companies are squealing, predictably. Sadly, the NSW government isn't mounting a claim on mining super profits this side of the border.
The urgency of generous funding for the Hunter's energy transformation is well argued by the Power and the Passion articles. Yet, if government is too timid to press for a share of the extraordinary profits flowing to foreign mining companies, be ready to despair when the sector enters its final days, when the revenue tap is more of a drip.