The pandemic and China’s trade restrictions have no doubt had some adverse effects on commodity volumes exported from Queensland, but super high commodity prices, associated partly with the war in Ukraine, have more than offset those impacts when it comes to dollars earned. Compare record total values of quarterly exports from Queensland with constant price estimates from the ABS which show a decline in the volume of exports since the start of the pandemic (Chart 1).
This means we may see a large boost to incomes and royalties, but not necessarily to employment which is more related to volumes exported. A large part of the boost to incomes would ultimately go to foreign shareholders of mining companies, but some of it would go to domestic shareholders and to employees. Last Thursday, the Courier-Mail reported Six-figure salaries, 10k sign-on bonuses as mining jobs boom hits:
Fat signing bonuses are increasingly being offered across the sector, with mining services firm Thiess promising a $10,000 sign-on bonus for workers who join the company and a $5000 bonus for a successful referral.
This Tuesday, state budget day, we will learn how many extra billions the state government has received through higher coal prices boosting royalties. As I’ve been posting on for a while now, coal prices have been at record, hitherto inconceivable levels (Chart 2). Of course, while this is boosting government revenue, it is increasing electricity prices domestically, I should note.
Nationally, we’re also seeing higher export earnings but lower volumes, too (Chart 3).
Nationally, the iron ore price is very relevant and this has been higher on average than what we saw for several years pre-COVID, too (Chart 4).
N.B. In chart 4, CFR stands for (shipping) cost and freight. That is, the spot price charted is inclusive of CFR.
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