A TAKE-OR-PAY clause in the Synergy coal contract should provide confidence for those working in the industry and Collie in general.
This is the view expressed by Collie shire councillors following a briefing from Premier Coal operations manager Jim Falconer at the last Collie Shire Council meeting.
Mr Falconer told councillors that Premier’s contract with Synergy had “floor and maximum” annual tonnage requirements. The contract, which is in place until 2030 with two five-year options after that, requires the State to purchase a minimum of 2.8 million tonnes of coal.
Councillors were told that should the State decide to close its coal burning power stations it would still be liable to pay for the minimum tonnage.
Mr Falconer said that despite recent “less than helpful” media reports, the company’s future, at least until 2030 was secure. Further, he believed that there was a long-term future for coal in the generation of base-load electricity.
Councillors were told that despite the emergence of rooftop solar and other alternative energy sources, Premier supplied Synergy with 3.88 million tonnes of coal in 2018.
Shire president Cr Sarah Stanley said Mr Falconer’s presentation was reason for optimism.
“This gives us some security while we continue to work on diversifying our economy,” she said.
Cr Stanley said the take-or-pay clause provided a buffer period for the town and this time would be used to secure Collie’s long-term future.
According to industry sources, the government is currently paying $45 for a tonne for coal. At this rate it would cost taxpayers’ $12.5 million a year, or over $308,000 a day, if State Government coal-burning power stations were closed down.
“I can’t see any government, regardless of its political persuasion, putting this sort of burden on the State,” said Cr Stanley. “The State would be better served by ensuring the economic environment is suitable to attract energy-intensive industries that would also provide jobs for our skilled workforce.”
She added that councillors had been pleased to hear that 71 percent of Premier’s 380 strong workforce was Collie-based.
“That’s 270 local people directly benefitting from Premier Coal’s presence in our community.”
Councillors were also pleased to hear that the company had made a commitment to do as much maintenance work as possible in-house, rather than get contractors in to do the work.
They also felt that keeping employees up-to-date on operational matters was commendable.
“Regular and transparent communications with workers and the community is essential to give peace of mind in the short term, while allowing them to plan for their future,” Cr Stanley said.