Failure to develop the Galilee basin will trigger soaring thermal coal prices in the future Report

Insight 06 August 2015

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Report summary

Pessimism is growing in the Galilee basin with Adani’s announcement that engineering work will be halted at its Carmichael project. Once seen to be inevitable, basin development now seems uncertain given weak markets, rising costs, financing concerns and environmental opposition. Our analysis shows that without Galilee basin exports, seaborne thermal coal markets will witness up to a 20% increase in price over time.

Introduction
Headwinds intensify and threaten Galilee mine development
If Carmichael fizzles, will other Galilee basin projects pick up the slack?
- Galilee basin production by mine, base case (Mt)
How will the seaborne market react if Galilee basin coal is unavailable?
- With no Galilee basin coal supply the seaborne market will demand more low rank coal
- Indonesia and the US will benefit most if the Galilee basin is not developed
- Seaborne trade flow patterns will be modified, especially in the long term, if the Galilee basin is not developed
- With no Galilee basin exports, seaborne thermal coal prices will soar, especially after 2028
Conclusion

Tables and charts

This report includes 9 images and tables including:

Failure to develop the Galilee basin will trigger soaring thermal coal prices in the future: Image 1
Change in demand by rank given no Galilee basin exports (Mt)
Change from base case in high rank demand given no Galilee basin exports (Mt)

Change from base case in high rank demand given no Galilee basin exports (Mt)
Change in supply given no Galilee basin exports (Mtpa)
Key changes in trade flows with no Galilee basin exports (Mt)
Failure to develop the Galilee basin will trigger soaring thermal coal prices in the future: Image 6
Price forecast for selected marker coals, two cases ($/t)
Failure to develop the Galilee basin will trigger soaring thermal coal prices in the future: Table 2