|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 today.|
‘Based on public statements and information provided to QRC, we estimate the Queensland coal industry has been forced to shed between four and five thousand positions over the past few months,’ Mr 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.
‘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.’
Mr Roche noted that on the upside for Queensland, the coal-seam gas industry added some 7,000 employees and contractors to its ranks in the first half of 2012.
‘From all reports, the gas sector in Queensland has continued to recruit strongly in the second half of 2012, providing an important buffer to pressures elsewhere on the state’s resources sector,’ he said.
Mr Roche said there were signs that global coal prices may have ‘bottomed out’ and that a recent strengthening in export volumes through Queensland ports was also encouraging.
‘I think we are also seeing in the wake of the US election and new political leadership in China signs of a more optimistic outlook framed around rapidly growing consumerism in Asia,’ he said.
‘China may not return to the heady days of double-digit growth, but the latest 7.4 percent growth rate for the September quarter is nothing to sneeze at in terms of its potential to lay a foundation for Queensland’s long-term prosperity.’
Mr 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.
Media contact: Jim Devine (07) 3295 9560