Outlook good but risky for coal
THE head of the Queensland Resources Council has delivered a chilling account of the state's coal industry to investors and industry heavyweights in Brisbane, as part of a two-day coal conference.
QRC chief executive Michael Roche told tables filled with coal industry chiefs of the parlous state of one of Queensland's most valuable industries.
While he admitted long term outlooks remained positive, with Queensland thermal coal exports to more than double by 2025, he said there were "significant risks" to the state's coal industry.
Mr Roche said the sector still had not recovered after the 2010-11 floods stripped the sector of 6% of its global market share - which was directly absorbed by American coal producers.Among the major risks to the future of the industry, Mr Roche said, was the carbon tax, the mining tax, "unsustainable" wage rates, the Fair Work Act and a global fall in coal prices in recent months.
"Drops of up to 36% in the prices for both thermal and metallurgical coals over the past 12 months are hard to ignore - particularly by investors weighing up the risks of funding new mining projects," Mr Roche said.
"As you know, BMA Coal has closed its Norwich Park coking coal mine and has confirmed that all development projects - other than Dauhinia and Caval Ridge - are under review.
"Ensham Resources has laid off 100 contractors from its thermal coal operations near Emerald.
"Rio Tinto Coal is cutting jobs at its Clermont thermal coal mine and winding up production at the nearby Blair Athol mine earlier than expected due to rising costs and weakening prices."
Mr Roche said that as coal producers wound down projects and performed "extensive cost reviews", further job losses were a certainty.
But not all the news for the industry was bad, with Mr Roche saying the election of the Newman Government was "a breath of fresh air for the Queensland resources industry".