A discussion paper for the state government’s electricity market review took stock of commercial fears for the Collie-based operations of Griffin and Premier Coal.

“Both of the Collie producers have publicly expressed concerns about the rising cost of their operations, compared with the long-term contract prices they are receiving for their coal,” the late July-released document said.

“It is well known that the seams being worked are becoming narrower with more overburden to remove. If prices need to increase significantly it may be that other coal resources become competitive or, more likely for power stations in the region of the Collie mine, there is the possibility of coal imports from countries such as Indonesia. This would provide an effective cap for domestic prices at import parity levels.”

However this assumption was challenged by Griffin.

Griffin told The West Australian the cost of importing coal from Indonesia was likely to be between $US100 and $120 a tonne – “more than double the local price”

Collie member of parliament Mick Murray told the newspaper it was implausible that Indonesian thermal coal would be cheaper than local production.

Phase one of the review is expected to be completed by late October. The steering committee is chaired by Paul Breslin, also a director of Queensland-owned coal miner and coal-fired power generator Stanwell Corporation.

Griffin was acquired by Indian company Lanco Infratech in 2011, with Lanco receiving state approval mid-year to develop an export terminal at Bunbury which could lift its exports from about 750,000 tonnes per annum to 10 to 12 million tonnes per annum.

Yancoal, a subsidiary of China ‘s Yanzhou Coal Mining, acquired Premier Coal from Wesfarmers in 2011 under a deal worth almost $300 million.