Australia is cracking down on coal miners: it set a AUD125/t cap on the price of coal sold to domestic power stations and required New South Wales, the country’s largest coal producing region after Queensland, to reserve up to 10% of output for the domestic market.
“Extraordinary times call for extraordinary measures, and we know, with the Russian invasion of Ukraine, what we’ve seen is a massive increase in global energy prices” said Anthony Albanese, Australia’s prime minister.
As part of the effort to push down energy prices, the government is cracking down on coal miners: it set a AUD125/t cap on the price of coal sold to domestic power stations and required New South Wales, the country’s largest coal producing region after Queensland, to reserve up to 10% of output for the domestic market.
Though these measures might affect long term projects, DBX Commodities does not expect it will have a material impact on export volumes in the short and mid term.
Australian power stations typically burn 5100 NAR coal and nearly all NSW exports are higher quality coal that fetch a higher price overseas.
What may follow could be a trading mechanism between the different coal miners that will allow coal miners to comply with the measure whilst maximising export volumes and revenues by exporting as much high quality coal as possible.
Source: DBX Commodities
