Brown coal pushed for export by: Matt Chambers From: The...

Brown coal pushed for export by: Matt Chambers From: The Australian October 15, 2009 12:00AM

Exergen, headed by former Woodside North West Shelf director Jack Hamilton, plans to spend more than $1 billion setting up a 12-million-tonnes-a-year business exporting the brown coal to power stations in India and other Asian countries.

The vast brown coal reserves in Victoria's La Trobe Valley region have a high water content, which partly results in them giving off less energy when burned, hence their use almost exclusively in domestic power plants.

Black coal from the Hunter Valley in NSW gives off more energy, making it a more attractive choice for coal importers.

Dr Hamilton's plan is to dry out Victoria's previously unexportable brown coal using recently-developed technology, boosting its energy content.

...Analysts said while Victorian brown coal exports were not inconceivable, they faced significant barriers, especially competing with Indonesia, the world's biggest exporter of thermal coal used in power stations.

"There is appetite for cheap, low-quality, low-energy thermal coal in emerging countries such as India," said one analyst.

"Victorian coal might find a market in such countries, but low-energy coals sell for a very low price and Victorian producers will find it difficult to compete with Indonesia on cost, especially as sea freight costs to places like India will be higher."

Dr Hamilton, who hopes to have the plant operating in 2014 if all goes well, said the process was competitive as long as the Newcastle coal price, currently at about $US70 a tonne, stayed above $US55.

So Exergen is pushing ahead, with the major backers the company has attracted giving credibility to its plans.

Major shareholders are Indian industrial giant Tata Power, Itochu, Japan's third-biggest trading house, Leighton Holdings and listed Australian coal plant builder Sedgman.

Exergen's plans are to reduce the emissions of brown coal, however it will not be cleaned up enough to compete with NSW's black coal exports in terms of quality and emissions.

Instead it would take on Indonesian coal, which sits between NSW's black coal and Victoria's brown coal on the quality scale.

Victorian Energy Minister Peter Batchelor told Melbourne ABC Radio that no decision had been made on the Exergen plan, which would involve piping coal slurry about 150 km to Port of Hastings

http://www.theaustralian.com.au/business/mining-energy/brown-coal-pushed-for-export/story-e6frg9e6-1225786864080