Australian brown coal or lignite is a low rank, low ash, high moisture content coal. In Australia, brown coal is currently considered unsuitable for export and is used primarily to generate electricity in domestic power stations. Deposits of brown coal in Australia are exclusively Cenozoic in age and occur in all States. The largest deposits of brown coal are located in the Gippsland Basin in Victoria where thick (up to 100 metres) seams of brown coal were deposited in a relatively short (as little as 30 million years) geological time span.

Victoria is the only State in which brown coal is mined. Open-cut mines at Anglesea, Loy Yang, Yallourn and Hazelwood supply coal to nearby power stations. Small quantities of brown coal are also mined at Maddingley to produce soil conditioners and fertilisers. Briquettes for industrial and domestic use and low ash and low sulphur char products are also produced from Victoria's brown coal.

Estimates of Australia’s Recoverable Economic Demonstrated Resource (EDR) and total Identified Resource of brown coal (Table 1) changed little between 2011 and 2012.

Table 1: Recoverable resources of brown coal in States and Northern Territory at December 2012 (million tonnes).

State	JORC Reserves (% of Accessible EDR)	Demonstrated			Inferred
		Economic	Paramarginal	Submarginal
New South Wales	0	0	0	0	0
Northern Territory	0	0	0	0	0
Queensland	0	0	0	0	0
South Australia	0	0	2 820	246	776
Tasmania	0	0	106	0	0
Victoria	0	43 651	30 111	14 939	99 980
Western Australia	0	513	365	0	1 746
Total Australia	0	44 164	33 402	15 185	102 502

Approximately 99 per cent of Australia’s brown coal EDR and 97 per cent of its total Identified Resource of brown coal are located in Victoria - predominantly in the Latrobe Valley.

Approximately 78 per cent of brown coal EDR is accessible. Quarantined resources include the coal beneath the APM Mill site (which had a 50 year mining ban applied in 1980), the town of Morwell and the Holey Plains State Park. The resource life of the accessible EDR (estimated at 34 095 Mt) at the 2012 rate of production is 510 years.

There are no publicly reported brown coal reserves that comply with the Joint Ore Reserve Committee (JORC) Code.

The Bureau of Resource and Energy Economics (BREE) does not report exploration expenditure data for brown coal. The Victorian Department of Primary Industries (VDPI) reported, however, that in 2010/2011, $7.9 million had been spent on brown coal exploration and a further $221.8 million on brown coal mining within Victoria. More recent data are not available.

In 2010-11, VDPI reported Victorian brown coal production at 66.7 Mt. Production of brown coal in Victoria has remained relatively constant during the last decade. It is likely, therefore, that production of brown coal during 2012 continued at a level similar to that reported for 2011.

Data on world coal resources are compiled and aggregated under two classification systems. In Australia, the term 'black coal' includes anthracite, bituminous and sub-bituminous coal and the term 'brown coal' refers to lignite. Under the international system, only anthracite and bituminous coal are included in the 'black coal' category and sub-bituminous coal is included with lignite and referred to as 'brown coal'.

Under the international classification system, Australia is estimated to hold 8.6 per cent of the world’s proven reserves of sub-bituminous coal and lignite and ranks fifth in the world behind the United States of America (28.2 per cent), the Russian Federation (23.7 per cent), China (11.5 per cent) and Germany (8.9 per cent).

Under the Australian classification system, it is estimated that Australia holds approximately 22.6 per cent of the world's recoverable EDR of brown coal.

During 2012, Australia produced approximately 7 per cent of the world's brown coal and is ranked as the third largest producer of brown coal after Germany (17.7 per cent) and Russia (7.5 per cent).

• In 2012, the Commonwealth Government and the Victorian State Government sought proposals from parties interested in developing pre-commercial demonstration scale, coal upgrading processes for raw lignite. Up to $90 million in funding was available to support projects assessed by the Commonwealth and Victorian Governments as addressing the program objectives. To be eligible for funding, the pre-commercial technologies must include coal upgrading processes such as drying, dewatering, char production and separation and may include liquefaction, combustion and gasification. Successful projects are expected to be announced during 2013.
• During 2012, the Victorian Government conducted an initial market assessment to gauge local and international interest in developing Victoria’s unallocated brown coal resources. This process will continue into 2013 and could lead to a decision to tender and ultimately allocate further brown coal resources in the State.
• Mantle Mining Corporation Ltd (Mantle) completed a 15 hole drilling program at Bacchus Marsh and reported a JORC compliant Inferred Resource of 1600 Mt. Mantle also executed a joint venture agreement with Exergen Pty Ltd. The Joint Venture plans to construct a $50 million demonstration project to transform the high moisture brown coals at Bacchus Marsh into low moisture briquettes.