Home
  • About
    • Philosophy and our goals
    • Governance
    • Organisational structure
    • Patrons
    • Our Impact
    • Tasmania
    • Jobs
    • Search
    • Annual reports
  • Research
    • Research Papers
    • Sort by Author
    • Submissions
    • National Energy Emissions Audit
    • Community Resources
    • Climate & Energy Program
    • Accountability Project
  • In the News
    • Media Releases
    • Infographics
    • Opinion
    • Podcast
    • Videos
    • Our blog
    • Petitions
  • Contact
  • Events
  • Subscribe
  • Donate
    • Make a one off donation
    • Make a regular donation

Styx Coal Project: Submission

The Styx Coal Project, also known as the Central Queensland Coal Project, is not financially or economically viable and should not be granted any form of project approval. Geoscience Australia has described the project area as “not of economic importance”. Figures presented in the environmental impact statement Appendix 10a – Economic Technical Report suggest the project will lose $441 million.

This estimate is in many ways optimistic. It includes no financing costs, no cost overruns and assumes that production starts immediately, taking advantage of higher initial coal prices. The project is not viable without government subsidy. It will not produce economic benefit for the proponents or the Queensland community unless major royalty holidays and subsidies are provided, subsidies that would come with a major opportunity cost for other Queenslanders.

Much data and analysis in the economic technical report is flawed. Royalty calculations are erroneous and overstate the value of project royalties by $175 million. Production of coal shows a huge peak in year 10, unusual in itself, while operating costs peak in year 12. These issues are not explained.

The economic impact analysis is based on input output modelling, a flawed modelling technique described by the Australian Bureau of Statistics as “biased” and by the Productivity Commission as “abused”. The same consultants used this methodology in another Queensland coal project, the Kevin’s Corner proposal. That study claimed Kevin’s Corner would be producing coal by 2014 and by 2017 would increase state output by $1.4 billion and generate 5,267 direct and indirect jobs. None of this has eventuated and Kevin’s Corner remains a hopelessly stranded asset.

The Styx proposal is less about developing a mine and more about increasing the asset value of the project for the proponent. This is commonplace not only in Australian mining projects but in major projects generally around the world. Economic literature highlights the bias and frequency of over-optimism and strategic misrepresentation in project assessment. Decision makers should be conscious of the economic literature on this topic and assessment processes should take it into account.

Type of Publication: 
Research
Section: 
Energy
Environment
Mining
Tags: 
coal mining, coal mine, Styx Coal

Download Publication: 
PDF icon P463 Styx coal submission FINAL.pdf

Author: 
Tony Shields
Rod Campbell
Posted on:
19 December 2017

>> Share this Page

  • Facebook
  • Twitter
  • Facebook
  • Twitter

.

The Australia Institute is the country’s most influential progressive think tank. We conduct research on a broad range of economic, social and environmental issues in order to inform public debate and bring greater accountability to the democratic process.

Sitemap:

  • About
  • Philosophy and our goals
  • Research
  • Opinion Pieces
  • In the News
  • Media Releases
  • Make a one off donation
  • Make a regular donation
  • Contact
  • Governance
  • Join mailing list

Other Initiatives

  • Centre for Future Work
  • The Australia Institute Tasmania
  • No New Coal Mines
  • Go Home On Time Day
  • Climate & Energy Program
  • The Australia Institute acknowledges Aboriginal and Torres Strait Islander peoples as First Australians and recognise their culture, history, diversity and their deep connection to the land.

    The team at The Australia Institute acknowledges that the Australian Capital Territory is Ngunnawal Country and pay our respects to Elders past and present.

  • Copyright The Australia Institute |
  • RSS feed |
  • Website Privacy Policy