Briefing paper
Resources
Description

A new coal project proposed for near Kingaroy, Queensland, is unlikely to bring economic benefit and presents risks for existing industries and the community.

The Kingaroy economy is focused on services and agriculture. Various service sectors make up over 50% of employment. Agriculture is 12% of employment and contributes substantially to local manufacturing industries that are centred on food processing. Tourism is a growth area for the local government.

Mining is not a substantial employer in the region overall, with less than 4% of employment. Most of this is centred on the Meandu coal mine and adjacent Tarong Power Station. Meandu only supplies Tarong and will be its only supplier for ‘many more years’ according to its owners, state-owned Stanwell Corporation. Outside of Meandu, mining employs less than 1% of workers in the region.

Meandu and Tarong account for a substantial portion of economic output in the region around Kingaroy itself, but as most of the customers and owners of these assets are outside of the region, local benefits are limited. By contrast, most agricultural businesses are locally owned and service industries such as health care and education clearly provide benefits to a large part of the local community. The wider Wide BayBurnett region does not have a significant mining industry.

The proponents of the Tarong Basin Coal Project are Moreton Resources, a small ASX listed company with little cash-flow. Earlier incarnations of the company and the project incurred fines for environmental breaches and Moreton is contesting tax issues with the Australian Tax Office.

A major problem for the project is how to get coal to market. With Tarong seemingly not an option, coal would have to be transported a substantial distance by rail or other means. Reconstructing rail would incur ballpark costs of $1 billion and would displace the recent local investment in rail trails for tourists to travel the region by bike.

This project is unlikely to be economic. Projects like Adani’s Carmichael Project have stalled despite the backing of large corporations. While the ‘inside view’ of the company sees value in the project, in the context of the wider Queensland economy and coal industry, it is unlikely to bring economic benefit.

It is unlikely that the Kingaroy coal proposal is in the economic interests of the Kingaroy community, or indeed the wider Queensland public. Policy makers should rule out the project due to the low likelihood of economic benefit, potential environmental and economic risks and the costs associated with ongoing uncertainty the community.

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