The Queensland Resources Council’s handy Queensland Economy website shows that the coal industry generates around $2 billion in royalties for the Queensland Government, so any decline in the coal industry would have serious budgetary implications. Hence I expect the Government will pay close attention to the QRC’s latest claims that the industry is struggling and action is needed on flooded coal mines. The Courier-Mail reports:
THE coal industry has hit a brick wall with another major miner reviewing all its expansions as exports plunge and BHP Billiton winds back its capital program.
Most thermal coal mines in Queensland are now claimed to be running at a loss.
Throughput at the ports has fallen dramatically with Dalrymple Bay down 8 per cent for the financial year and Abbot Point down 10 per cent.
The Queensland Resources Council has claimed that further job losses are certain.
It is urging the State Government to find a new way to shift a vast volume of water – the equivalent of half of Sydney Harbour – from central Queensland mines that is holding back about 25 million tonnes of production.
The water has been locked in since the 2011 floods and the industry cannot dispose of it into creeks and rivers because of environmental concerns.
The floods that filled the mines cost the industry about $7 billion and allowed US producers to take about 6 per cent of the market share.
Luckily Queensland will start exporting LNG in the next few years, as it is becoming apparent that the coal industry may not deliver the economic bounty the QRC has previously advised us was coming – indeed the large projected increase in coal royalties can still be seen on the Queensland Economy website I linked to above.
Earlier this year, CBA Commodity Analyst Lachlan Shaw questioned the outlook for Queensland’s coal industry: