Another coal project bites the Valley dust

Two out of three Latrobe Valley coal development projects that received state and federal government funding have now failed to materialise.

Ignite Energy Resources is the latest recipient to pull out of the $90 million Advanced Lignite Demonstration Program that aimed to develop niche industries using the area’s brown coal resource, including pulverised coal for steel manufacturing, fertiliser and briquettes.

The company had been awarded $20 million to develop an $84.3 million plant to create a synthetic crude oil to produce a range of fuels.

In the wake of speculation that Hazelwood’s power station and mine could close as early as next year, the news has received a mixed reaction of concern for future jobs and heightened calls to redirect funding for the Latrobe Valley’s transition away from coal.

Latrobe City councillor Graeme Middlemiss said a representative of Ignite had attended a jobs forum in early September and had expressed the view their development had been delayed by the State Government.

“I’m extremely disappointed that the proposal didn’t come off,” Cr Middlemiss said.

“We cannot afford to keep losing job opportunities for the Latrobe Valley.”

The ALDP received joint funding from federal and state governments in 2012, with three projects selected in 2014.

Shanghai Electric received $25 million to develop a $119 million demonstration plant at AGL’s Loy Yang power station to produce briquettes for Chinese export to fuel a power station in Shanghai, but this failed in November last year.

The third recipient, Coal Energy Australia has been given a second extension to meet State Government requirements by July 2017.

Environment Victoria campaigns manager Nicholas Aberle said the coal projects were picked out of dozens of funding applications but had not delivered on anything.

Dr Aberle said both federal and state governments should pull the plug on the projects and put the money towards a Hazelwood closure transition fund.

He also noted the State Government’s coal program review due to be released this year should consider the projects as the most modern examples of alternative coal projects’ unviability.

“Pie-in-the-sky coal projects have never delivered any benefit to the Latrobe Valley. We should start valuing the Latrobe Valley for its people and its skills, not for what’s under the ground,” Dr Aberle said.

A State Government spokeswoman for Industry and Employment Minister Wade Noonan said any support for new coal technologies must be based on their viability and benefits.

“No government funding has gone to any of the three companies because the projects awarded were never developed,” the spokeswoman said.

“Any unused funds will be considered for other government priorities.”