Job losses in the Queensland coal industry were a painful reminder of the industry’s trade exposure but some encouragement could be taken from recent global developments, Queensland Resources Council (QRC) Chief Executive Michael Roche said.
“We estimate the Queensland coal industry has been forced to shed between 4,000 and 5,000 positions over the past few months,” Roche said. “These losses have hit contractors the hardest and extend from the coalface to head office. They are a sad but inevitable consequence of a collapse in coal prices and rising production costs.
“In the past, export industries like coal have been insulated to some extent by a corresponding fall in the value of the dollar, but Australia’s high interest rates and Triple-A credit rating have cancelled out this prospect,” Roche said. “In the meantime, wage and materials costs in Queensland coal mines have continued to soar. With the current price and cost imbalance we can expect a continuing focus on reducing costs across the board, including an expectation that suppliers of goods and services will ‘sharpen their pencils’ on price.”
Queensland coal producers also need to cover the added costs of the higher coal royalties that came into effect last month. Roche said that while he remained optimistic for the long-term, the message to him from the chief executives of Queensland’s coal companies was that they are digging in for a very challenging 2013 where the focus will stay on reducing costs and re-building export volumes.