West Australian Energy Minister Mike Nahan said Synergy would pay more for its coal supplies, but said the terms of the agreement would remain confidential between the parties.
Nahan said any increase in the annual subsidy paid to Synergy would be offset by the benefits of the government’s decision to re-integrate the state’s electricity generation and retail utilities, and not through an immediate increase in regulated electricity prices.
“The state government through Synergy has worked hard with the owners of Premier Coal to finalise an amended supply agreement that is critical to the future of the state’s economic development and the security of electricity generation,” he said.
“While alternative energy sources are available, including renewable generation which has been developed at unprecedented levels by the Liberal National Government since 2008, coal is significantly cheaper than the alternatives.
“We are committed to the security of Western Australia’s future energy supply and have pursued the best course of action to ensure that this occurs.”
The revised agreement includes a coal price rise for Premier, supporting the continued operation and future viability of the open cut mine, as well as greater contractual rights for Synergy.
Yancoal manages the Premier Coal mine on behalf of its majority shareholder Yanzhou Coal Mining Company Limited.
Yancoal regional general manager (Queensland and Western Australia) Paul Stringer said: “The revised coal supply agreement enables Premier to continue to develop its future mine plans and invest in required operational improvements, while providing certainty of supply for Synergy in the long-term.
“Premier Coal continues to play a critical role in meeting the energy needs of Western Australia and providing employment and training opportunities for the local Collie community.”
Premier’s coal supply underpins about 48% of Synergy’s sent out electricity, representing about 37% of the South West Interconnected System generation.
Premier Coal is a domestic supplier of thermal coal, producing about 4 million tonnes per annum and employs about 300 people.
