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Tuesday, July 12, 2011

Our Coalmining Industry won't be destroyed afterall

It seems the coal mining industry won't be destroyed by the carbon price afterall. Coal mining giant Peabody energy and steelmaker ArcelorMittal have teamed up to bid $15.50 a share to buy Australian miner Macarthur Coal. The $4.7 billion bid is the biggest takeover offer ever made for an Australian coalminer. Climate Change Minister Greg Combet said the government has been saying all along that the Australian coalmining industry has a bright future under a carbon price. "The industry is profitable, prices are high and there is a sizeable pipeline of planned new investment" he said "The only person talking the coal industry down is Tony Abbott, who has made the reckless and untrue claim that a carbon price will destroy the Australian coal industry."

But Senator Barnaby Joyce wasn’t having it. "Just because they buy mines in other places doesn't stop them from closing down unprofitable mines, and they will become unprofitable when they bring in the carbon tax” he said. Tony Abbott said yesterday "I have staked my political life, what's left of it, on stopping this carbon tax". "I figure for people in the coal industry, it's a hit on your potential employment and it's going to be a hit on your standard of living."

Macarthur's shares closed down 32c, or 2.8 per cent, at $11.08 yesterday as the market digested the impact of the carbon tax on the coal sector. Peabody chairman and chief executive Greg Boyce said last night his company believed there was "significant value that can be created by managing Macarthur's portfolio of coal assets." Peabody says that its coal fuels 2 per cent of global electricity generation and that it is a leader in "clean coal solutions".

Gloucester Coal, which is 65 per cent-owned by Singapore commodities trader Noble Group, says investors have not been frightened off by the carbon tax. Chairman James MacKenzie said "I was in London last week on a road show for Gloucester Coal, so I would have seen 20 institutional investors and there was not one grizzle about the carbon tax," he said. " It is not something that will affect the economics of the coal industry perhaps as much as Bob Brown would like it to."

When I look to the future, say in around 100 years from now, I see a picture of a decimated landscape across the whole country, ugly gaping holes everywhere, all our resources gone and all the billions of dollars earned from them spent. I only hope our politicians can see it too.