Australian Coal Faces $3.5 Bln C02 Costs, Group Says

By Angela Macdonald-Smith

March 24 (Bloomberg) -- Australia’s coal-mining industry faces costs of about A$5 billion ($3.5 billion) in the first five years of the country’s proposed emissions-trading system, the national coal industry group said.

The extra costs will mean increased job losses and reduced investment and will result in a drop in Australia’s share of the global thermal coal market, Ralph Hillman, executive director of the Australian Coal Association, said today in Sydney. As many as 10 mines risk closure because they won’t be able to pass on additional costs, Hillman said.

Australia is due to introduce a national emissions trading system on July 1, 2010, to help reduce gases blamed for global warming. Woodside Petroleum Ltd., operator of Australia’s biggest liquefied natural gas project, Caltex Australia Ltd. and CLP Holdings Ltd.’s TRUenergy Pty unit are among companies that have criticized aspects of the plan.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net