Glencore comments on NSW coal price cap and coal royalties
Media statement
Sydney, Australia
Glencore urges the New South Wales (NSW) Government to engage the coal sector in a genuine two-way consultation process after signalling changes to the coal price cap and the coal royalty rate system.
Coal is one of the state’s most important sectors, which has consistently delivered for the people of NSW in terms of jobs, royalties, investment, and energy security with coal continuing to deliver about 70% of the State’s electricity.
The coal price cap is very poor public policy and shows that flawed market interventions by government pose serious domestic and international reputational risks.
Prior to the introduction of the coal price cap, we asked to see the previous NSW Government’s modelling that would show a benefit to the electricity consumer. None was provided and the coal price cap has failed to provide a benefit to anyone other than the electricity generators.
Electricity prices are driven by supply and demand. To lower the cost of electricity while also increasing the share of renewable energy, government needs a pragmatic approach which protects the security of the current electricity supply while also encouraging additional supply.
The NSW Budget is already benefiting from increased coal royalties with mineral royalties lifting by more than 50% to A$5.5 billion in 2022/23. These royalties contribute to funding NSW hospitals, schools, infrastructure projects and essential services.
The key risk to continued coal production, and government royalties, is the increasing difficulty in securing project approvals from Federal and State governments. Without continued coal production, the discussion on coal royalties may become a moot point.
Drastic changes to the royalty regime for a revenue grab like the Queensland Government will put investment and associated jobs at risk across the Hunter region, at a time when the region is already under pressure.
It’s important that the NSW coal sector and the contribution of the thousands of coal mine workers are not taken for granted.
Glencore looks forward to genuine discussion with the Minns Government on public policy.
For further information, please contact:
Francis De Rosa
m: +61 417 074 751
e: Francis De Rosa
Notes for editors
About Glencore Australia
In Australia, Glencore produces coal, copper, cobalt, nickel, zinc, lead and silver from 23 mining operations. We also operate metals processing assets in Queensland, New South Wales, Western Australia and the Northern Territory, including metals smelters, concentrators and refineries.
We are among Australia’s largest producers and marketers of natural resources, connecting Australian resources with industrial customers around the world. Through our diverse portfolio, we responsibly supply the resources that advance everyday life.
We employ 18,190 people in Australia and in 2022 contributed almost $20 billion to the regional, state and national economies. This included spend of $10.4 billion with 7,370 businesses across the country, as well as $7.5 billion in government tax, royalty and rate payments.
We are committed to providing a safe, inclusive and respectful workplace for our people, to respecting the environment, to engaging openly and constructively with the Traditional Owners on whose lands we operate and to bringing value to local communities.
Glencore recognises our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement. Our ambition is to be a net zero total emissions company by 2050. In August 2021 we increased our medium-term emission reduction target to a 50% reduction by 2035 and introduced a new short-term target of a 15% reduction by 2026.
Learn more about Glencore Australia.