A proposed Victorian brown coal export industry will almost certainly fail to materialise – and even if it did, it would do little to create jobs in the Latrobe Valley, according to a new report.
As the Baillieu government considers whether to open up vast coal fields for development, an analysis has found higher processing and transport costs would mean a local export industry would struggle to compete with places such as Indonesia, which has better quality brown coal and is closer to buyers in India.
If plans to turn the valley into a mining export hub were viable, the analysis found the economic benefits for Gippsland was likely to be limited as other industries – particularly manufacturing and agriculture – would just lose employees to coal companies.
The analysis by consultants Economists at Large was commissioned by Environment Victoria.
Victorian Energy Minister Michael O'Brien responded that no report on brown coal commissioned by the green group could be taken seriously given its ''political and irrational opposition to clean coal technology''.
The government is expected to announce whether it will make new allocations of coal before the end of the year. The Department of Primary Industries has estimated there is about 13 billion tonnes of potentially economic coal in the Latrobe Valley.
The report highlights the failure of the state's last coal allocation in 2002, when the Bracks government allocated 17 billion tonnes to three companies.
None were developed, and the Baillieu government quietly reclaimed an allocation to international resource giants Anglo American and Shell last year after it failed to meet development milestones.