A new report has urged the NSW government to oppose federal subsidies for a proposed coal mine in Queensland's Galilee Basin as it could cost the state $10 billion in royalties and force mines to close.
The proposed development of Adani's mine in the Galilee Basin could directly impact the price of coal and reduce NSW coal royalties by $10.2 billion between 2023 and 2035, according to a report released by the Australia Institute on Monday.
The report, based on industry analysis commissioned by the Port of Newcastle, suggested that the fall in coal price would force NSW miners to cut back on production and could see some to close.
The analysis, by Wood Mackenzie, estimated the Queensland mine could reduce coal prices by 25 per cent and cut NSW exports by 80 million tonnes a year.
Without the Galilee Basin mega mine, the report predicted a rise in NSW coal production along with an increase in coal's value.
"TheNSW governmentandNSWcoalindustryshouldstronglyopposethedevelopment oftheGalileeBasin,particularlywithsubsidyfromfederalandQueenslandstate governments," the report said.
But NSW Premier Gladys Berejiklian says her government's estimate of the impact on the budget is considerably lower.
"We're still looking at what the impact is likely to be in NSW, but we don't think it will be that bad as what's been stated," she told reporters.
Opposition Leader Luke Foley said the government needed to be more open to allow an informed discussion of the mine's impacts.
"I am concerned about the displacement effect, where jobs and economic activity in NSW suffers as a result of a big new project in another state," he said.
Resources Minister Don Harwin said the report assumed all proposed Galilee Basin mines would go ahead despite not being financially committed.
NSW coal was "mostly superior" to that of the Galilee Basin, Mr Harwin added, and the state typically sold to a different section of the global market than where the Adani mine proposed to export to.