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Australia’s big coal miners are in talks with the government of New South Wales state over the surprise plan to have the companies hold back as much as 10% of production for domestic supply, Reuters reported Friday.
The country is seeking to hold down costs for households by capping soaring gas and coal prices, and New South Wales wants to boost the effort by beefing up domestic supply of coal, most of which gets exported.
Australia’s government passed legislation in December to cap natural gas prices for one year, and won agreements from top coal producing states of New South Wales and Queensland to cap the price of coal sold to power plants.
North South Wales Treasurer Matt Kean said this week the state would expand the scheme to include coal miners that do not currently sell into the domestic market, requiring them to reserve 7%-10% of production for domestic use.
Major coal exporters including BHP (NYSE:BHP), Glencore (OTCPK:GLCNF) (OTCPK:GLNCY), Whitehaven Coal (OTCPK:WHITF) and Yancoal (OTCPK:YACAF) likely would be part of the wider plan.
China recently ended its unofficial ban on Australian coal.
