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Australia was the world's leading exporter of coal. Australia ranked behind China and India in the Asia and the Pacific region in coal output; the country, however, Queensland and New South Wales were Australia's leading coal producing States and accounted for more than 95% of the country's total output. Australia's coal reserves are estimated at 90.5 billion short tons, and approximately 60 percent of annual production is exported, with 60 percent of coal exports destined for Japan. In the decade leading up to 2002, coal production grew by 4 percent annually, reaching 378 million short tons that year. Proposed tariffs on coal imports into Japan as well as competition from China's coal sector could weaken the industry in the future.

In 2008, Australia mined out 431 Mt of raw coal, of which 332 Mt of salable coal was black (bituminous and anthracite) coal. Queensland's coal output accounted for 54.8% of the country's total output and was mainly from the Bowen Basin, which extends south from Collinsville to Blackwater and Moura, and from mines at Blair Athol, Newlands, and near Brisbane. New South Wales's coal output accounted for 42.6% of the country's total output and was mined near the eastern and western edges of the large Sydney Gunnedah Basin. In 2008, Australia exported more than 261.2 Mt of coal (metallurgical coal, 134.8 Mt, and thermal coal, 126.4 Mt) compared with 250 Mt in 2007. Japan was the leading destination for Australian metallurgical coal, 37.7%; followed by India, 18.4%; the European Union, 16.3%; the Republic of Korea, 4.8%; and others 22.8%. Japan also was the leading destination for Australian thermal coal, 53.8%; followed by the Republic of Korea, 19.4%; Taiwan, 15.7%; and others, 11.1%. Domestic coal consumption was less than 70 Mt, of which the power sector accounted for about 85%; followed by steel, 6.7%; cement, 1.3%; and other, 7%. The Australian Government projected that Australian production of salable coal would increase to 404 Mt and exports would increase to 325 Mt in 2014.

The infrastructure bottlenecks held back Australia's mineral exports, especially coal. The government of Queensland committed $5 billion to expand coal transport infrastructure, including state-owned railways and ports and privately owned coal terminals. The total export capacity of rail and port systems would enable coal exports of more than 210 Mt/yr in 2010. The coal handling capacity of the Abbot Point, Brisbane, Gladstone, and Hay Point coal export terminals would be increased to 230 Mt in 2009 and then to 340 Mt if the State government of Queensland deemed it necessary. The government of Queensland also planned to list its coal and rail freight network for sale, and the State would keep between 25% and 40% of the business. The State government of New South Wales decided to increase the coal royalty tax rate by 1.5% to cover infrastructure development funding.

Waratah Coal Pty Ltd. announced that the company had discovered coal resources of 4.4 Gt at the Galilee Basin in Queensland. Waratah Coal proposed to construct a 40-Mt/yr coal mine near Alpha (west of Emerald) and named it the "China First project." The China First project would use a right to mine 1.4 Gt of coal from tenements EPC 1040 and Australia-2008 [advance release] 3.11 EPC 1079 for 25 years. The development cost was estimated to be $6.75 billion (A$7.5 billion), which included the construction of a mine, processing plants, a 450-megawatt powerplant, and a 490-km railway line linking the mine site to the export coal terminal at Abbot Point. Waratah Coal signed a memorandum of understanding with China's state-owned China Metallurgical Group Corp. (MCC), for which MCC would provide the engineering and construction support for the China First project and would provide or arrange for 10% of the capital funding needed for the project. Under the terms of arrangement, MCC would have the right to purchase 30 Mt/yr of coal.

Australia was the second ranked uranium producer in the world after Canada. Australia's uranium production was mainly from three mines-the Beverley, the Olympic Dam, and the Ranger. A number of undeveloped deposits in the Northern Territory, Queensland, South Australia, and Western Australia also exist. The Australian Government permits uranium mining, provided that all the relevant environmental safeguards and health requirements are met. Regulation of Australia's uranium mines is mainly a State and Territorial government responsibility. Among the States and Territories, only the governments of the Northern Territory and South Australia permitted uranium mining before 2008. Western Australia lifted the ban on uranium mining in the State in 2008. BHP Billiton planned to reactivate its Yeelirrie uranium project in Western Australia. Owing to financial problems, Uranium One Inc. suspended the construction of the Honeymoon project in South Australia, but restarted construction after Japan's Alliance Resources Ltd. and Mitsui & Co. Ltd. purchased a 49% equity share in the project.

Australia is one of the few countries belonging to the Organization for Economic Cooperation and Development (OECD) that is a significant net hydrocarbon exporter, exporting about two-thirds of its total energy production. Australia is the world's fifth largest exporter of liquefied natural gas (LNG) in 2007, after Qatar, Malaysia, Indonesia, and Algeria. Australia's prospects for expanding these energy exports in the future are promising as Asian demand for both coal and LNG is rising. While Australia also exports crude oil and refined petroleum products, it is a net importer of oil. Hydrocarbon exports accounted for 18 percent of total export revenues in the June 2007-June 2008 period.

The States of Western Australia and Victoria accounted for most of Australia's oil and condensate and liquefied natural gas (LNG) production. The Carnarvon Basin, which is located off the coast of Western Australia, accounted for 63% of the country's total production. Production from the Carnarvon Basin was mostly exported, and production from the Gippsland Basin, which is located off the coast of Victoria in southeastern Australia, was used mainly to feed local refineries. In 2008, Australia's oil production decreased slightly from that of 2007. The Angel condensate and gas project, which was located 115 km offshore Western Australia and the Vincent oil project, which was located off the shore of North West Cape, Western Australia, started production in 2008. Australian oil production was expected to increase by about 2% during the next several years. The increase would come from the Crux and the Skua/Swift oilfields in the Bonaparte Basin; the Basker/Manter, the Kipper, and the Turrum oilfields in the Gippsland Basin; and the Pyrenees and the Van Gogh/Coniston oilfields in the Carnarvon Basin. Australia was a net importer of oil and refinery products. In 2008, the country's net imports of crude oil and condensate totaled 64.46 million barrels (Mbbl) (10,248 million liters), and imported petroleum products totaled 101.74 Mbbl (16,175 million liters).

Oil reserves are estimated at 3.5 billion barrels, an increase of 20 percent over 2001 levels. Oil production peaked in 2000 at 805,000 barrels per day but has fallen since then and is expected to level out at 560,000 barrels per day in 2006. Australia has eight refineries with a total crude oil distillation capacity of 754,975 barrels per day, but the refinery sector has suffered from declining gross margins. ExxonMobil closed its Adelaide refinery in 2003, and further closures are expected.

Natural gas reserves are estimated at 90 trillion cubic feet, making Australia the largest reserve in the Asia-Pacific region. Disputes over rights to large reserves in the Timor Sea between Australia and East Timor continue despite the signing of the Timor Gap agreement in March 2003. Australia began exporting liquefied natural gas (LNG) in 1989 and by 2002 was the sixth largest global exporter of LNG. Japan is the primary market for Australian LNG, although China, South Korea, and Spain also purchase smaller shipments. A proposed sale of 12.5 percent of the Gorgon field's proven reserves (estimated at 12.9 trillion cubic feet) to China's CNOOC would generate US$21 billion in sales over a 25-year period, making it the largest export commitment in Australia's history.



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Page last modified: 11-07-2011 15:32:19 ZULU