Cokal managing director Peter Lynch told ILN issues such as the carbon tax, Minerals Resources Rent Tax and the numerous regulatory processes involved in Australian coal production had forced the company to look offshore.
“The tide is turning here in Australia. It’s not just one thing, it’s a number of things starting to work against the Australian industry,” Lynch said.
“There’s a lot of regulatory issues coming into Australia … even exploring is a very long-winded process.
“Getting grant access, coming to arrangements with landowners … the summation of those steps is quite onerous.”
Lynch’s candidness comes after the company announced a joint venture to explore for coal mining potential in Africa’s Mozambique, a primarily untapped region for coal.
Rio Tinto has just wrapped up a takeover of Riversdale Mining, which has coking coal projects in Mozambique.
While Cokal already has an accelerated drilling program at its Bumi Barito project in central Kalimantan, Lynch said the move to explore in the area of Mozambique was because it had more to offer than Australia.
“We were driven offshore mainly because there were much better opportunities in terms of value for money and geological prospect activity,” Lynch said.
Mozambique has the potential to be the largest coking coal basin in the world.
“It’s ultimately, in our view, going to rival the Bowen Basin in terms of its size potential,” Lynch said.
The three year minimum arrangement to explore in Mozambique will work on the basis of a signed cooperation agreement with government owned mining company Empresa Moçambicana de Exploração Mineira, which will see the government providing leases for Cokal to explore.
Affordable prices and getting in before the rush makes Lynch confident of Cokal’s ability to capitalise on Mozambique’s coal.
“This agreement reflects the confidence that Cokal holds in the Mozambique region for high quality coals and a stable and improving operating environment,” he said.
Lynch said the looming carbon tax and MRRT would not necessarily kill the Australian coal industry, but may continue to force other Australian coal company’s overseas.
“I think things will get worse before they get better,” he said.
