The looming demise of a loss-making coal mine in Western Australia is a microcosm of the industry's "dire" prospects as a fuel for electricity amid the rampant rise of renewable energy, an analyst says.
Expectations are growing that the Griffin Coal mine near Collie, about 180km south of Perth, will be tipped into receivership in coming days following years of heavy losses believed to exceed more than $1 billion.
Lawyers for the Indian-owned mine have been fighting in the West Australian Supreme Court to stop a bid by its biggest customer, the Bluewaters power station, to take control of the operation.
However, Griffin lawyer Konrad De Kerloy has acknowledged creditors to the mine, including Indian bank ICICI, have already prepared a draft receivership document.
In court earlier this week, he said the document was still subject to "some negotiation" but the situation was "near to some form of closure".
The apparent preparedness of Griffin to appoint receivers brings to a head a long-running saga that has been playing out ever since Indian interests acquired the operation from the wreckage of fallen coal tycoon Ric Stowe's failed business empire.
It may also head off moves to take control of the mine by Bluewaters, which is owned by huge Japanese conglomerates Sumitomo and Kansai but ultimately controlled by some of the most feared activist investors on Wall Street.
Sitting behind Bluewaters are so-called vulture capital firms including Elliott Management and Oaktree Capital, which have forged a reputation for taking on some of the biggest companies in the world, including BHP.
'Always bad news for coal power'
Simon Nicholas, an analyst at the Institute for Energy Economics and Financial Analysis, said the courtroom battle between the two sides was a sideshow to the main event unfolding around them.
Mr Nicholas said regardless of who gained control over Griffin, coal mining in WA was on borrowed time as the state government wound down its coal-fired power stations and customers turned away from fossil fuels.
Under an announcement in June, the West Australian government said it would close its remaining coal plants by 2029, while it revealed it would not agree to buy half the output from Bluewaters when current contracts expired in 2025.
"This is a ratchet that only turns in one direction," Mr Nicholas said.
"It's always bad news for coal-fired power.
"We just don't see any good news, any improvement to the long-term outlook anymore."
According to Mr Nicholas, Western Australia's coal industry was particularly vulnerable to the rise of renewable energy and the reduction in demand for coal-fired power because it did not have access to export markets.
He noted this was in contrast to eastern states coal suppliers, which had been making windfall profits in recent months after Russia's invasion of Ukraine sent fossil fuel prices soaring.
Despite this, Mr Nicholas said the long-term outlook for east coast coal miners was not pretty, and that forecast falls in demand for coal-fired power could accelerate given the high prices.
He said the West Australian example was of global significance.
"Western Australia is becoming a bit of a microcosm for the future of coal," he said.
"Even a few, perhaps four or five years ago, if I'd suggested or predicted that coal would fall out the WA power system this quickly, well, I wouldn't have believed it myself, I don't think.
"It's an example of how these energy transitions always tend to happen faster than people think.
"It's been quite incredible."
Showdown 'an inevitable end'
Last week, it emerged that Bluewaters was seeking to appoint a controller to run the Griffin mine following months of failure by the operation to supply contracted volumes of coal.
The 440MW power station, which is Australia's newest and was only commissioned in 2009, is one of the biggest generators in WA's main electricity grid, which services the south-western corner of the state.
Bluewaters typically supplies up to 15 per cent of the electricity generated in the system, selling to major industrial customers including giant gold miner Newmont and state-owned utilities.
However, records from the Australian Energy Market Operator, which runs the market in WA's main grid, show output from Bluewaters' two units has dramatically fallen away in recent months.
South West Upper House Liberal MP Steve Thomas said the imminent demise of Griffin was overdue, arguing the mine had been running on a "broken business model" from the beginning.
Dr Thomas said that while the end of the mine would provide much-needed impetus to efforts to consolidate Collie's mining industry, many workers and their families would ultimately lose out.
"I think we're coming to the inevitable end of what's been a very long, drawn-out problem," Dr Thomas said.
"Griffin under its current business model is not going to survive in the longer-term and it's now simply a matter of looking at what happens next.
"But I think it's going to be extremely difficult to sell the asset."
For Dr Thomas, the imminent end of coal mining in Collie meant it was imperative for the State Government to ensure the town had a proper transition plan in place.
He acknowledged the government had directed "hundreds of millions of dollars" towards Collie but said not all of the money had been well spent and much of the focus should be on attracting blue-collar industries.
