You can now pick a coal mine up for $1. Literally $1. The Isaac Plains coal mine in Queensland’s Bowen Basin changed hands this week for less than the cost of a cup of coffee. But cheap coal mines come with a sting in the tail. Cheap coal mines come with the liability to tidy up the enormous mess that comes with digging enormous holes, shifting millions of tonnes of dirt and extracting tens of millions of tonnes of coal.The challenges facing the coal mining industry are becoming too clear to all except our senior politicians. China and India simply aren’t buying as much coal as the Australian forecasters and modellers said they would. The cost of renewable energy is falling much faster than the forecasters and modellers said it would. Household-scale battery storage wasn’t meant to be affordable for another 20 years. Can you see the pattern?
Industries that can’t see the writing on the wall go broke all the time. Kodak didn’t think digital cameras would take off, and Nokia thought the whole “smart phone” thing was a niche market. While modern governments and business lobby groups loudly agree that “business needs certainty”, in reality, capitalism is based on the premise that there is no certainty in business. Investors take risks and the good ones make returns.
While the multibillion-dollar losses of the coal mining companies are of obvious concern to their shareholders, in a well-functioning market they should be of little concern to Australian taxpayers. The fact that someone who bought a company for $860 million four years ago is willing to sell it for $1 today is their problem not ours, right? Wrong.
The mining industry, domestically and internationally, has a long history of walking away from unprofitable mines and leaving the mess for others to clean up. Just this month it was reported that WA taxpayers might have to pick up the $30 million tab for the Ellendale diamond mine, which went into administration. Just this week a coal mine poured pollution into the world heritage listed HaLong Bay in Vietnam. And, of course, the Hazelwood mine fire that devastated the town of Morwell wouldn’t have happened if the mine owner had delivered on commitments to progressively remediate the site.
Canberra Times: Richard Denniss: 31 July 2015
Key Words: Coal OzPolitics