Australia's mining boom a challenge?

CANBERRA, Australia, April 20 (UPI) -- Australia is witnessing an unprecedented mining boom, the country's Treasurer Wayne Swan said Wednesday, Mining Weekly reports.

The mining boom, which Swan referred to as Mark 2 following the resources boom of the early 2000s, "is gathering pace and it will mean extraordinary new levels of income flowing into Australia, building our national wealth and incomes," he said.

Swan said Australia's terms of trade in iron ore and coal exports had risen to their highest sustained level in 140 years.

But as mining companies reinvest their profits, the resources boom would generate less revenue than it did before the global financial crisis, the treasurer said.

The boom "will also test the capacity of our economy and our workforce. And it will bring with it structural adjustments for our economy equal in magnitude to any we have seen before."

Swan said that expected mining investment for the next year would more than double from the year before, for the first time surpassing private business investment plans for the rest of the economy.

In separate news, the Australian Coal Association warned that closing mines was the only way the sector would be able to cut emissions from coal mines between now and 2020 under the government's proposed carbon pricing scheme.

The government's proposals call for Australia to introduce a price on carbon emissions from July 2012, effectively operating like a tax. Then an emissions trading scheme could begin as early as 2015.

In an interview with the Australian Broadcasting Corp., the association's chief executive, Ralph Hillman, said a carbon tax would cost the country's coal industry $18 billion over the next 10 years. He suggested the government "go back to the drawing board" in addressing emissions.

The proposed carbon pricing scheme would lead to a decrease in the sector's growth and job losses in Australia but not a decrease in emissions, Hillman said.

Instead, he said, coal would be mined in other countries such as South Africa, Indonesia, Colombia and Mongolia and "emissions will go up just the same." Australia is the world's biggest coal exporter.

Hillman said fugitive emissions, released during the mining process, should be excluded from the carbon price scheme for about 10 years while new clean technologies are developed.

"There is no technology that miners can suddenly pull out of their pocket and apply that's going to get those emissions down. Closing mines is the only option," he said.