Carbon sector to take $8bn off value of Australian coal mining industry

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Australia's planned carbon tax will reduce the value of its coal industry by about $8 billion through increased fuel costs and the pricing of mine emissions, energy consultant Wood Mackenzie said today. In a report on the carbon tax plan announced earlier this month, the group said the impact of the tax on industry costs would be "quite small", but added that companies are still likely to rethink investments as a result of the changes.

The decrease in companies' net present value - the current value of all their future earnings - would range from 2 per cent to 15 per cent, Wood Mackenzie analyst Ben Willacy said, with an average of 4 per cent across the industry equivalent to $8bn of overall net present value. Australia is the world's biggest coal exporter by volume, and the worldwide carbon output of its coal exports is on par with Germany's domestic greenhouse emissions. However, the carbon plan announced earlier this month will only affect domestic industry, meaning that coal mines will mostly be hit by a decrease in rebates they receive for their diesel fuel, and pricing of the methane gas that escapes from their coal workings...