Analysts say jobs and exports from existing coal regions will be decimated by development in the Galilee Basin.

Resource analytics firm Wood Mackenzie has forecast the effects of coal mining expansions in central Queensland’s huge Galilee Basin.

The modelling was commissioned by The Infrastructure Fund, which holds a 50 per cent stake in the privatised Port of Newcastle.

The experts say there would be massive reductions in future coal output from the NSW Hunter Valley and significant falls in Queensland's Bowen and Surat basins if coal mining goes ahead in the Galilee.

The Federal and Queensland Governments want to make Galilee the first new coal region in 50 years, pledging to back almost any investment with hefty subsidies.

But while the development of the Galilee Basin would expand overall coal exports overall, it could cost jobs and economies in other regions.

The report found Galilee Basin output would;

  • Displace ten new mining projects or mine expansions in the NSW Hunter Valley, either shelved entirely or delayed
  • Stop or delay eight mining projects or expansions in Queensland
  • Knock Hunter Valley thermal coal output down by about 37 per cent, or some 86 million tonnes
  • Cut Bowen Basin output by nearly a third
  • Lead to 37 per cent less coal being produced in the yet-to-be-developed Surat Basin in south-east Queensland

Wood Mackenzie's head of mines and metals consulting Dominic Tisdell says there is a serious amount of coal to be exploited.

“We forecast about 120 million tonnes to come from the Galilee Basin, possibly up to 150 million tonnes,” Mr Tisdell told the ABC.

“That will mean the main development for thermal coal will happen in the Galilee Basin and not as much in other areas such as the Surat, the Hunter Valley or Indonesia.

“In the Hunter Valley, we expect that most of the existing mines will operate for the terms of their natural lives — many of the mines are world class and will operate into the 2030s and beyond.

“What it will mean though is that new mines … will probably be delayed in preference to new developments in the Galilee Basin.”

Jonathan Van Rooyen from The Infrastructure Fund said the Port of Newcastle would see some “pretty devastating” impacts.

“I'm an investor, not a politician, but it seems a perverse outcome when you are taking jobs in one part of the country and promoting them there and displacing them or destroying them in other parts of the country,” he told reporters.

“The addition of significant new coal supply from a new basin will inevitably displace coal production, and coal jobs, in existing coal basins in NSW and Southern Queensland.

“To the extent that the Adani [Carmichael] mine lives up to its promise to be automated 'from pit to port' it is likely that substituting a million tonnes of coal production in the Galilee for a million tonnes of coal production from NSW will result in a net reduction in jobs.”

“The Government is preparing to give subsidies of up to a billion dollars to open up a new coal region at a time of flat world demand.

“Put simply, either the $1 billion loan to Adani will have a significant impact on coal production, and jobs — in the Hunter Valley, Bowen Basin and Surat Basin — or the business case for the Adani rail line is deeply flawed.”