Officials from the government said Thursday that Australia’s most populous state will soon require coal miners to keep up to 10% of their production for the domestic market. This is part of a national plan to stop energy prices from going up too much.
In December, Australia’s Labor government, which is led by Prime Minister Anthony Albanese, capped the price of natural gas for a year. They also got New South Wales (NSW) and Queensland to agree to cap the price of coal sold to power plants.
NSW Treasurer Matt Kean said on Thursday that the state would require coal miners who don’t sell their coal on the domestic market to save between 7% and 10% of their output for domestic use.
As part of the federal government’s plan to bring down energy prices, he said, the new deal would make sure that coal companies shared the burden more fairly.
The main companies that sell coal to power plants in the state are Banpu’s Centennial Coal of Thailand and Peabody Corp.
BHP Group (NYSE:BHP), Glencore (OTC:GLNCY) Plc, Whitehaven Coal, Yancoal, and New Hope (OTC:NHPEF) Corp., all of which focus on exports, are also big coal miners in the state.
The NSW Minerals Council, which represents miners, said that the policy wouldn’t have much of an effect on electricity prices, but it could upset trade partners, raise costs by disrupting existing supply chains, and discourage future investments in the state’s resources.
The CEO of the NSW Minerals Council, Stephen Galilee, said in a statement that extending the policy to coal producers who aren’t currently involved in the domestic coal supply is a big change that shows how rushed the policy process has been.
He also said that coal producers would keep talking with state officials “to make sure that this bad policy doesn’t hurt the economy too much.”
Whitehaven said Thursday that it was talking with officials from the state government about supplying coal.