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Can the Abbott Government revive Australia’s flagging coal industry?

Almost 70 per cent of delegates polled at the 33rd Coaltrans World Coal Conference believed that the loss of the Labor Party in Australia’s recent election would have a positive impact on the nation’s beleaguered coal industry.

Currently, Australian coal mines are paying the world’s biggest price on carbon - $24.15 a tonne, but the new Government, led by Prime Minister Tony Abbott, has pledged to introduce a globally-competitive approach to emissions reductions.

The Abbott Government is moving swiftly to repeal the existing carbon pricing scheme with effect from 1 July 2014 and effectively start again in dealing with carbon emissions through a direct action plan, which in part involves purchasing emissions reductions, said Michael Roche, the chief executive of the Queensland Resources Council and a keynote speaker at the event.

Within the total number who thought the result of the election would have some sort of positive effect on the industry, 20 per cent said it would have a “significant impact” as a repeal of the carbon tax would improve the costs structure of Australian mines and encourage additional investment.

Just under a third said it would have a “small impact” while 17 per cent thought there would be a “temporary” effect. Only 1 per cent said that it would have no impact as Australian producers have already lost their competitiveness in global market and a repeal of the carbon tax will not change that.

Many experts have described the election as a referendum on the carbon tax. Emily Medine, a senior associate at Energy Ventures Analysis and a panellist at the event which was held in Berlin, said it was a “pendulum” of the current challenging economic environment and the fact that the carbon tax is viewed as a “significant burden”.

She believes, however, that it could be brought back in around five years’ time.
This content is provided by Coaltrans Conferences for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.

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