The Western Australia government has expressed its commitment to facilitate a merger of the state’s only coal mining companies as the 2030 deadline to phase out state-owned coal assets draws near.
According to Premier Roger Cook, the negotiations regarding this merger will be conducted independently, though he believes that the necessity of the merger is clear.
The state administration is collaborating with privately-owned coal companies to finalize the details of this merger, which is part of a broader strategy to consolidate WA’s remaining privately-owned coal operations before the self-imposed deadline to close all state-owned coal power plants.
This proposed merger would combine Griffin Coal, owned by an Indian firm, and Premier Coal, which is under Chinese ownership, into a single entity that will provide coal to the privately operated Bluewaters power station.
While the final decision rests with the mining companies involved, Premier Cook expressed confidence that a consensus would be achieved. “I may not be directly involved in those discussions, but it’s clear that consolidation is likely,” he noted.
Firm Deadline Ahead
In 2022, the WA government announced its intention to retire all state-owned coal-fired power facilities by 2030. Earlier this year, Premier Coal revealed plans to cut between 70 and 100 jobs at its Collie mine site, attributing the layoffs to a decrease in demand for coal-fired energy.
Griffin Coal has been financially supported by WA taxpayers since 2022 when it entered receivership due to concerns that its failure could disrupt electricity supply in Perth and the South-West region, potentially leading to blackouts and threatening numerous local jobs. Over the past five years, the state government has invested $240 million to stabilize this privately-owned entity.
“I am uncertain about the coal sources for the future, as we will no longer be subsidizing the coal mines as we currently do,” Mr. Cook asserted.
As state support wanes, local Labor representative Jodie Hanns has been advocating for federal assistance. “The federal government has intervened to support various projects nationwide, including in Whyalla,” she remarked. “It is time for our transitioning workforce to receive federal support as well.”
The state government has already allocated $700 million for decommissioning state-owned power facilities and for transitioning the coal-mining community of Collie to alternative industries.
In January, a task force named the Collie Basin Consolidation Taskforce was established to propose a future operational structure for the state’s remaining two coal assets. This task force includes mine operators, lenders, major customers, unions, and government officials, and has recommended a merger.
Mr. Cook acknowledged that overseeing the future of the coal mining sector is a “complex issue,” but he emphasized the potential advantages of the merger. “It creates economies of scale and enables workforce blending, allowing older employees to retire while retaining skilled workers,” he explained.
However, Shadow State Energy Minister Steve Thomas criticized the announcement for lacking specifics. “We’ve been discussing the benefits of fully integrating the coal companies in Collie for over 15 years, and this report doesn’t advance us any further,” Mr. Thomas stated. “It will likely cost the state government hundreds of millions in taxpayer funds to facilitate this exit.”
Renewable Future Remains Elusive
The WA government’s $230-million Collie Industrial Transition Fund has set the stage for the development of several new industries, but few have reached a point of final investment decisions. Today, an additional $58 million in funding was announced for Collie, aimed at rehabilitation, infrastructure development, and workforce transition initiatives, including targeted voluntary redundancy programs.
Upcoming projects in Collie include Generation Steel’s green steel initiative, International Graphite’s processing facility, and Magnium Australia’s magnesium refinery.
Collie Shire President Ian Miffling expressed optimism about the potential new industries but cautioned that they may not materialize in time to facilitate a seamless transition for coal workers. “These prospective industries are still in their early stages and need to secure their financing,” he said, “But there is a risk of a gap during this transition.”
