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“Calculations undertaken in the past by some analysts have assumed that the introduction of the carbon tax could add as much as $16 per tonne to the cost of coal from NRE mines,” Gujarat said.
“Based upon a detailed review of the carbon tax requirements and consideration of options available for the efficient management of gas within each mine, this prediction is considered to be grossly inaccurate and does not represent the real impacts on future mining operations.”
As widely anticipated by analysts, Gujarat expects it will be eligible for government assistance from the Coal Sector Jobs Package, the key coal industry assistance bundled with the proposed carbon tax.
But Gujarat expects to minimise its tax impacts through a “substantive” emissions management strategy which is being developed.
“We have actively investigated action that will be undertaken to reduce our total emissions of greenhouse gases,” it said.
“The development of new underground roadways separate from the old and existing mine workings, supports the sealing off of these old workings and prevents waste gases from being included in our mine’s ventilation system.
“Into the future the company is committed to utilising ventilation controls, the sealing of old mining areas and gas drainage techniques that will allow the capture and flaring of gas.”
Using this strategy, Gujarat said the potential carbon tax impacts would be around $2.70 for each tonne of coal produced.
“It is apparent that the direct impacts of the carbon tax will be minimised and this is not expected to impinge on future growth of the company.”
The Illawarra coal miner’s NRE No.1 mine (formerly South Bulli) had first operations dating back to 1887 while mining at its Wongawilli mine (formerly Elouera) started in 1916.
Both mines are targeting annual production of 3 million tonnes per annum over the next four years, with NRE No.1 scheduled to start up longwall mining in December.
Both the old workings and new mining areas can provide fugitive emissions.
Gujarat shares are unchanged at 21c this morning.
