Collie’s Premier Coal back in black with huge revenue jump

WA’s biggest coal miner Premier Coal has returned to profit after an $84 million loss the year before, putting it in a far stronger position than embattled rival Griffin Coal — which is in receivership and operating with state government support.

Chinese-owned Premier turned a small profit of $2 million in the 12 months to December 2023, according to accounts lodged with the corporate regulator, with sales revenue leaping 52 per cent to $291 million.

Premier Coal supplies Synergy’s Muja and Collie power stations.Credit: Premier Coal website

The result comes after a troubled 2022 when a wet winter and safety problems caused it to under-deliver its main contract to supply the Collie and Muja power stations run by state-owned power generator Synergy.

Combined with issues at Griffin, Synergy was forced to close its Collie power station for months to reserve coal for peak summer loads.

Opposition energy spokesman Steve Thomas said WA’s coal miners were in crisis.

“The mismanagement of the coalfields for the past 20 years means power prices will go dramatically up or the lights go out,” he said.

“There is little alternative but to prop up the coal owners, but it [the government] needed to be honest about how bad the situation was.”

Thomas said new renewable generation is not being developed quickly enough and the coal-fired stations should not be closed until sufficient new gas-fired generation is built that can later support green energy.

“The government is just throwing money at it until after the election,” he said.

In December, the Cook Labor government allocated $220 million to support Griffin’s mining until mid-2026.

Energy Minister Reece Whitby said Liberal mismanagement had led to skyrocketing power prices, and they were not listening to the industry and experts.

“It’s simply not sustainable to run state-owned coal-fired power beyond 2030 – for the economy, the electricity system, or the environment,” he said.

“That’s why we’re investing billions into clean energy generation, transmission, and storage, to ensure our system is cleaner, affordable, and reliable into the future.”

Premier’s main revenue comes from a 25-year contract to supply coal to state-owned power generator Synergy’s Muja and Collie power stations that expires in 2030.

Premier and Griffin also supply coal to privately owned Bluewaters Power station, South32’s Worsley Alumina and Adbri’s lime plant in suburban Munster.

The rise in revenue indicates Premier is receiving a significantly higher average price for each tonne a coal it sells.

A Synergy spokeswoman declined to be drawn on the details of any commercial supply agreement, insisting they could not be disclosed by either party.

Premier, owned by Chinese company Shandong Energy Group, increased its provision for rehabilitating its mine after closure from $43 million to $56 million.

Its accounts noted that the state government’s 2022 decision to close Synergy’s two coal-fired power stations by 2029 had significantly shortened the life of its mine, bringing the cleanup costs forward.

Premier is discussing various mine site closure scenarios with the WA government and the final cost could “vary materially” from the current estimate.

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