Coal allocation process delayed

NEWS late last month that a potential tender process for further Latrobe Valley coal allocations has been delayed at least six months by the State Government has drawn mixed reactions.

State Government Energy and Resources Minister Michael O'Brien announced just prior to Christmas the government intended to make an announcement on the "next stage" of the process by mid this year, despite expectations it would announce the tender's commencement in December.

The minister said a recent market assessment confirmed "local and international interest in the brown coal resource" and the project would now "move to a deeper market engagement process to further promote the development opportunity and to gain a more detailed understanding of market conditions and interest."

Mr O'Brien said a decision to go to tender would "be guided by the potential to secure long-term economic, investment and employment benefits for the Latrobe Valley and Victoria".

State Member for Morwell Russell Northe denied the delays indicated a lack of genuine interest from the market in tapping into the Valley's extensive coal resources.

"My understanding is there has been strong interest and that the market assessment is ongoing," he said.

"I understand some of the same players who have expressed interest (before) are still interested and there is also new interest, both local and international.

"It is imperative though that we get this right, so if more time needs to be taken to understand the nature of future projects, it is critical we get it right, from a local perspective," Mr Northe said.

Latrobe City Council chief executive Paul Buckley said council was "keen to see outcomes" from the process "as soon as possible" to provide "certainty for the community in terms of... the location of future allocations so we get planning for urban development in Latrobe, and through the region, right".

He said the Regional Growth Strategy, and its Integrated Land Use Plan, would "feed into" the process so that "development happens in areas that are appropriate and can be balanced with the ongoing, sustainable use of the resource, for our economy".

The Minerals Council of Australia Victoria Division released a statement encouraging the government "to proceed with a tender in a timely manner to align with investment and demand cycles".

MCA Victoria executive director Megan Davison said coal was a low-cost power source which had "directly contributed to the economic development of the state and on most projections, most recently the White Paper, the future for coal remains bright".

She promoted proposals for converting coal into a "range of products including fertiliser, diesel and export coal quality coal".

"With gas demand in Victoria soon to exceed production, the production of natural gas from brown coal also holds significant economic potential for the state," Ms Davison said.

Meanwhile Environment Victoria welcomed the delay to any announcement as "good news for farmers and our environment".

EV's safe climate campaigner Victoria McKenzie-McHarg said a similar allocation process in 2002 by the previous State Government "completely failed to generate any new jobs or investment for Victoria and instead created windfall profits for private companies".

Ms McKenzie-McHarg said "it would be ridiculous" for the State Government to "replay the mistake all over again when the warning signs are clear" and claimed a recent report showed "a new coal allocation is unnecessary".

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