The Latrobe Valley could be transformed into a mining export hub on the scale of the Pilbara or the Hunter Valley thanks to new brown-coal technology, a senior Gillard government minister has declared.
Speaking at an international coal symposium, Resources and Energy Minister Martin Ferguson said Victoria could soon deliver its first export shipments of modified brown coal.
Mr Ferguson's comments come after the Baillieu government last month confirmed it would reignite stalled plans to open up untouched Latrobe Valley coalfields for tender.
With the state possessing about 9 per cent of the world's recoverable brown coal reserves, Mr Ferguson said it could become a mining powerhouse akin to the Pilbara, the North-West Shelf, the Hunter Valley and central Queensland.
''These technologies have the potential to allow Victoria to export brown coal and allow the Latrobe Valley to join the ranks of Australia's other great mining regions,'' Mr Ferguson said.
Rising energy costs and concerns about energy security and climate change were driving interest in brown coal beyond power generation, he said.
Use of brown coal has historically been limited due to its high moisture content and low value and the risk of combustion, but Mr Ferguson said technology had the potential to change this ''in the not too distant future''.
Development of brown coal industries by transforming it into dry briquettes, gas, urea or diesel is backed by business lobbies such as the Australian Industry Group, but criticised by environmentalists who say it undermines Australia's claims to be cutting greenhouse emissions.
Environment Victoria's Mark Wakeham said Mr Ferguson and his Victorian counterpart, Michael O'Brien, were "working hand in hand to open up incredibly polluting coal fields".
"There is no non-polluting way that this coal can be used and claims of low-emissions brown coal are a pipedream," Mr Wakeham said. "If successful this would dwarf the emissions reductions from putting a price on carbon."
A similar plan was considered by the previous Labor state government but shelved amid fears of a voter backlash about its greenhouse gas emissions.
Mr Ferguson and Mr O'Brien told the symposium their governments were committed to working together to develop technology that reduced brown coal's greenhouse gas emissions.
As evidence they cited CarbonNet, a Latrobe Valley carbon capture and storage project which in February received $100 million in joint funding.
Mr O'Brien said carbon capture and storage and coal drying technology could develop higher-value products with lower emissions. ''This offers great potential for new export products, new jobs and economic growth,'' he said.
Brown Coal Innovation Australia, a body set up by the Brumby government in 2009, is researching new uses for coal with a target of no project having an emissions intensity greater than 0.2 tonnes per megawatt hour – about half that of a baseload gas-fired power station. Chief executive Phil Gurney said: ''Victoria is an ideal position to meet the challenge of lowering emissions while capitalising in a
responsible way on world demand for brown coal.''
This week's event at the Grand Hyatt was attended by investors and experts from 23 countries and closed to the media. The ministers' speeches were released by their offices.
The event was targeted by activists from Quit Coal, who said they gave delegates pamphlets warning that new coal developments were likely to suffer budget blowouts due to legal challenges and protests delaying construction. ''Quit Coal pledges to fight all new brown coal projects in Victoria,'' spokesman Neil Erenstrom said.
The symposium coincided with the release of a report on the design of the federal government's $10 billion Clean Energy Finance Corporation, planned to provide loans and co-investment to companies to boost the sector.
In his speech, Mr Ferguson said the government accepted its responsibility to cut emissions at a pace that allowed the economy to grow. "This will lead to the opportunity for new industries and jobs in areas like the Latrobe Valley that others may have assumed would have a downturn in a carbon-constrained economy," he said.
But he said calls for a shift to a 100 per cent renewable energy supply ignored industry's need for cost-effective baseload power – ''something renewables cannot yet deliver''.