Being forced to close due to lack of energy supply is a very different thing from actually wanting to close the plant.
NZ is an excellent “how not to” guide to energy. Plenty of hydro, geothermal and wind and they’ve also got plenty of coal. And yet despite all that, they’re literally shipping coal to a port then trucking it to a coal mine.
From a purely technical perspective there’s no reason why NZ needs to burn coal to generate electricity. And even if they do want to burn coal, it’s not essential to import that coal given they have their own.
Now I won’t dwell on politics on what is intended to be a stock thread but I will point out that fundamentally this is the outcome of political decision making and that is by no means unique to NZ. Some see the elimination of coal use as a priority, others are more focused on getting CO2 emissions of their books, others are more worried about other economic, environmental or ideological matters. Etc.
The net effect of that is higher coal consumption, and lower production, than would be the case if driven by technical factors alone and that’s positive for the coal price.
That situation occurring simply because politics will never result in coal being mined where there is no coal but it will on occasion prevent coal being mined where it does exist. Likewise politics will never avoid the use of coal where it is essential, but it will at times cause the use of it where it is not essential.
Australia’s coal production does look to have peaked and to now be in decline, but at the global level coal’s not going away as fast as many seem to expect. From Australian Government statistics:
Australia’s black coal production peaked in 2018-19 at 453.8 million tonnes. Production in 2022-23 was 399.8 million tonnes.
NSW black coal production peaked in 2019-20 at 199.7 million tonnes. Production in 2022-23 was 167.2 million tonnes.
Queensland black coal production peaked in 2018-19 at 250.6 million tonnes. Production in 2022-23 was 227.2 million tonnes.
WA black coal production peaked at 8.0 million tonnes per annum between 2013-14 and 2015-16. Production in 2022-23 was 5.0 million tonnes with the industry effectively broke and on life support from government. Some coal has been imported (from NSW) to supply local consumption.
Tasmania coal production plateaued a bit over 0.4 million tonnes per annum during a prolonged period mid-1980’s to circa 2020. Production is now rapidly declining however, with coal being imported (from NSW) to supply local use.
Victoria hasn’t mined black coal since 1968 and no black coal as per official definitions has ever been mined in SA or NT. That said, SA coal is black by other definitions – production peaked about 3.9 million tonnes per annum in the late 00’s and is now zero.
So overall production in Australia is in decline but at the global level there’s still plenty of demand for coal. That being so, it’s stock specific when it comes to investing in it.
