PERTH (miningweekly.com) – India has been tipped as Australia’s greatest new thermal export market, with the potential to create at least 4 000 new direct jobs in regional Queensland.

A new report by the Office of the Chief Economist, titled 'Coal in India 2019', notes that India’s rapidly growing demand for energy presents a golden opportunity for Australia to increase its thermal coal exports to the country.

Minister for Resources and Northern Australia Matt Canavan said the report provided a detailed examination of recent developments in India’s energy, electricity and mining policies and how they could impact on its future demand for thermal coal.

“As the highly respected author of the 'India Economic Strategy to 2035' Peter Varghese said this week, there is no market in the world that has as much potential for increased trade with Australia as India. This report clearly illustrates that potential,” Canavan said.

“Australia is already a strong and reliable energy partner for India as it continues its rapid development trajectory and brings its people out of poverty. We can grow this relationship further.

“The growth of India’s energy sector is truly astonishing. Since 2000, more than 500-million people have been ‘switched on’ to electricity, with coal providing around 44% of India’s energy mix.

“However, by 2017 there were still 168-million people living in India who had no access to electricity. That is almost seven times the population of Australia.

“If we could lift our thermal coal exports to India to the same market share we currently have with China - to just under 25% of their imports - we could export an additional 37-million tonnes of high energy, low ash thermal coal.”

Canavan pointed out that this would be the equivalent of three or four new Adani Carmichael–sized coal mines. If this investment occurred in the Galilee basin, it would open up a new, sustainably-sized coal basin in Queensland.

“Based on current average prices for 2019, this would bring in an extra A$3.4-billion in export income and provide around A$240-million of additional royalties for state governments to invest in schools, hospitals and roads.

“In line with that, we’d also be looking at potentially creating upwards of 4 000 new jobs for Australians in the coal sector, with these jobs predominantly being in rural and regional areas.

“And it is vital to remember that our coal is the best coal in the world – high in energy, low in ash, and therefore has a critical role in helping India reduce its own emissions.”

Canavan said the report found India’s coal consumption was likely to continue increasing over the next decade, and possibly beyond, to meet India’s growing energy needs.

“India is a large coal producer and its domestic production is growing. Australian coal is a perfect complement, not a replacement, for Indian coal. We specialise in a high quality coal that can be easily blended with Indian coal to produce better outcomes for all,” he said.

In 2018, Australia exported five-million tonnes of thermal coal to India, which was 2.3% of Australia’s thermal coal exports, and only 4.5% of India’s thermal coal imports.

“We can do better than this. The recent approval of the Adani Carmichael mine could just be the start of a new trade that can bring wealth and jobs to Australia,” Canavan said.

“There is also room for us to boost our exports of metallurgical coal to India as their steel sector continues to grow. We currently export 45.3-million tonnes of metallurgical coal to India, which is around 25% of our total metallurgical coal exports and just over 70% of India’s import needs.

“India’s desire to improve the safety and productivity of its domestic mining operations also presents an opportunity for Australia’s world class mining equipment, technology and services sector.”

The Queensland Resources Council (QRC) has welcomed the release of the report, with CEO Ian Macfarlane saying Queensland was in the ideal position to make of the most of the opportunities through more trade with India.

“Queensland should keep playing to our strengths. And that means seizing the opportunities to meet an expanding market for coal and other Queensland commodities,” Macfarlane said.

“It makes sense to export Australia’s high quality coal for use in global markets, because our coal has a higher energy content and produces lower emissions than coal from other exporting nations.

“By creating stronger trading partnerships with India, Queensland can help deliver a range of commodities that India needs to grow and deliver a higher standard of living for its people, and at the same time benefit every Queenslander.”

Macfarlane said that there were also new opportunities for the export of Queensland zinc, gold and liquefied natural gas as a result of India’s continuing economic growth and urban development, pointing out that India’s demand for zinc is forecast to grow by 7.6% each year to 850-million tonnes in 2021.

“New resource projects and new markets for Queensland commodities mean more jobs, more investment and more money paid back to Queenslanders through royalty taxes.

“QRC looks forward to further strengthening the trading partnership between Australia and India, and in particular between Queensland and India.”