THE signals being sent from various quarters about the mining boom are confusing.
For example, the Centre for Policy Development reports that the current utilisation of Queensland coal ports is just 65%, as opposed to the industry average of 85%.
It's that and the projection that coal capacity would expand six-fold if all proposed mining were to go ahead that may well be behind BHP's decision to abandon plans to develop a coal export terminal at Abbot Point near Bowen.
According to CPD's projections, Hay Point near Mackay will serve the industry's needs until at least 2020, and then only if the global thermal coal market expands and Queensland doesn't lose market share to cheaper producers.
On the other hand, the Queensland Resource Council is reported to have said: "Although coal prices are down (actually by 22% since 2010), demand is forecast to grow at 3-5% per annum into the foreseeable future."
Back to the CPD: long-term World Bank forecasts are for coal prices to be in the range of $US70 per tonne when many of Queensland's new projects are relying on $US120 per tonne to be viable.
Confused? Then there's the elephant in the room. China has decided to cap energy consumption by 2015.
Just how are forecasts by think tanks like the CPD and QRC - and the World Bank for that matter - going to stack up in light of this?
How are our miners going to reduce production costs, particularly in light of the possibility that the incoming head of the US Federal Reserve, Janet Yellen, may phase out Bernanke's quantitative easing policy of printing cheap money in order to stop the housing bubble and record share prices there.
The effect will be a stronger US dollar and anincreased cost of mining equipment - imports of which by the way reduced to a trickle in the latest balance of trade numbers, despite commodities remaining by far our biggest export earner.
And where does all this leave Wiggins Island?
This may seem like wrist-slashing stuff for the coal industry, although QRC's forecast of 5% per annum growth would see coal exports double in 14 years.
If the industry can get on top of its out-of-control production costs and hang onto its global market share, the future may well be rosy.
Think of how quickly changes to traditional methods are made these days. Where do you reckon the coal industry will look to attain profitability and continue to contribute to our export earnings?
Watch this space for news of increased robotics in coal production, reduced wages and giant government handouts both direct (like those to the car industry) and by way of pre-production tax concessions that will dwarf what's currently on offer.
As the value of our dollar comes back to where it should be, you'll see cost inflation and a determination by treasury to find ways of keeping our balance of trade numbers acceptable.
And there's nothing on the horizon that will replace the mining export earnings which Australia has grown accustomed to relying on for more than a decade.
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