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The reason everyone thinks our coal miners totally rock

Queensland’s coal miners are suddenly the most popular political demographic in the country.

Feb 17, 2020, updated Feb 17, 2020

Labor under Anthony Albanese has been performing almost ritual obeisance to regional Queensland since the 2019 election — though not enough, allegedly, for a coterie of right-wingers who want the party to appeal even more to fossil-fuel interests.

Meanwhile, the Nationals are tearing themselves apart and destabilising the Government over coal-fired power, while fossil-fuel fetishist Matt Canavan claims the party is “the party of workers, workers in coal mines, workers in shipyards and workers in factories”.

The CFMMEU has a slightly different view, funnily enough.

For all their popularity, there aren’t actually that many coal miners in Australia. According to the ABS, the number stood at 50,000 in September 2019, but an average over the year to September is probably a better guide, given the quarterly number bounces around. That figure sits at 52,000. That’s about a fifth of the entire mining workforce.

For perspective, 52,000 coal miners compares to 270,000 farmers (the constituency that the Nationals are more usually associated with), 300,000 building construction workers (and another 100,000 heavy engineering workers), 390,000 people in food retailing, over 800,000 people in cafes, bars and restaurants, 275,000 road transport workers, 630,000 preschool and school teachers, 490,000 people in hospitals, 270,000 aged-care workers.

You get the point.

What coal lacks in employees, however, it more than makes up for in economic clout: it generated $70 billion in exports in 2018-19.

More than three-quarters of our coal is exported; despite coal still dominating Australia’s electricity supply, domestic consumption of coal has been declining for a decade.

And while thermal coal, used to produce electricity, is a slightly bigger export by volume, it’s metallurgical or coking coal, used in making steel, that is the real revenue earner. In 2018 its price was more than twice that of thermal coal — a difference expected to widen over the next two years.

The coal industry argues that there’s no suitable replacement for coking coal, given alternative methods such as electric arc furnaces only recycle existing steel.

Groups such as Greenpeace dispute that and argue that alternative methods simply need investment and a wind-down of coking coal exports. China has already committed to substantially increasing the proportion of scrap steel in steel production, but only to 30 per cent.

It’s likely that demand for steel will continue to drive demand for coking coal for some years to come.

With renewables now cheaper than coal, however, it’s a very different story for thermal coal.

A similar process of shift away from coal-fired power has occurred in other developed countries as it has in Australia, and in China as well.

In response to growing distaste for coal in key markets, coal exporters have targeted less developed countries, and especially India.

A government report last year declared that India was “a bright light for thermal coal exporters confronted with falling demand in Europe, North America and North East Asia … India is one of the great hopes for thermal coal exporters (alongside South-East Asia).”

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Nonetheless, the report, prepared by the Department of Industry, warned that India “also presents significant risk. If India’s thermal coal imports decline, there could be substantial implications for seaborne markets”.

As Tim Buckley of the Institute for Energy Economics and Financial Analysis pointed out, even putting aside the cost of renewables versus coal for a developing economy, the report ignored India’s pursuit of energy security and its commitment to reducing and ending coal imports.

Scott Morrison’s planned, then abandoned, trip to India in January was intended to encourage the Indians to import more coal from Australia.

That’s why, as the Reserve Bank has pointed out, there’s been limited investor interest in new coal mines in recent years, given “the outlook for coal prices and demand is increasingly uncertain, particularly for thermal coal”, even assuming bullish forecasts for coal demand from the International Energy Agency.

With an uncertain coal export environment and the “bright light” of Indian coal imports flickering, you can start to see why some Nationals desperately want to increase coal-fired power production here.

Not that they’re alone in their support for coal.

By far the biggest spender in the 2019 election, Clive Palmer, has a strong interest in expanding coal exports via the development of the Galilee Basin, where his Waratah Coal is the largest tenement holder.

Palmer is best known for running his own political parties now, but it’s barely a decade since Palmer bankrolled the creation of the Liberal National Party from the struggling Liberal and National branches in Queensland.

When it comes to the supporters of coal, there are far bigger players than 52,000 miners.

This article was first published in Crikey.

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