Coal giants and gas firms set for clash  

Posted by Big Gav in , ,

The Australian has an article on the looming clash between coal miners and coal seam gas producers in Queensland - Coal giants and gas firms set for clash

THE massive ramp-up planned in Queensland coal seam gas production to feed Gladstone liquefied natural gas plants could face delays as key players look to develop acreage the state's coalminers also have their eyes on. ...

Under Queensland's legislation, ground can be explored by both miners and CSG producers at the same time. When it is time to convert it to production leases overlapping claims are subject to negotiation between CSG and mining companies.

If this is unsuccessful, the Queensland government will have to make a ruling. The government has not been placed in this position yet, but as applications to reserve ground for gas production gather pace, disputes are more likely.

"Coal seam gas is in areas which coalminers are now starting to look at opening up, because the global financial crisis has passed and metallurgical coal prices are moving up," said Paul Newman, head of energy at law firm Blake Dawson. "From our perspective, there is a regime that will come under pressure from this process. There is uncertainty about what the government will do."

Early plans by Xstrata for a massive 100 million tonnes a year coal province near Wandoan in the Surat Basin is also expected to spur other miners with overlapping CSG exploration tenements. In a recent tenement overlap dispute between CSG producers and the small underground coal gasification sector, the Queensland government ruled on the side of the CSG producers. It is hard to see state government, which collects royalties from the world's biggest coking coal export industry, siding so quickly with the CSG industry if the coal industry moves against it.

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