Business

What the mixed signals about mining's future really say

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.

Topics:  coal gladstone business mining mining boom resources



How to survive a bushfire in your car

IT SOUNDS like a nightmare, but it can happen.

Eight reasons to join the RFS

SPREAD across 93% of Queensland, the Rural Fire Service has about 36,000 volunteers. And you could be one of them.

What if my insurer gives me grief?

CLAIMING your insurance cover after a natural disaster can go one of two ways. It can be a breeze, or like pulling teeth.

Rio Tinto throws in $6m for Glastone

HELPING HAND: Damian Morgan, Tina Zawila and Kylie Devine are part of the Here for Business program supported by the Rio Tinto Community Fund.

MINING GIANT throws in a whopping sum for Gladstone locals.

He 'snapped' when his pregnant partner refused sex

Domestic violence and assault is one are of law which the Murwillumbah Local Court deals with.

MAN threatened to kill himself in front of their kids.

Pay rise for Gladstone mayor, councillors

Mayor Matt Burnett.

GLADSTONE'S LEADERS will enjoy watching their pay rise soon.

Local Partners

EXCLUSIVE: Meet Robert Irwin, wildlife photographer

SNAPPER: Apart from wildlife, photography is Robert Irwin's great passion.

Steve's boy has a passion for photography

Louis Tomlinson's tribute to late mother

Louis Tomlinson's new single is a tribute to his late mother.

Justin Timberlake stuns students with secret class

Justin Timberlake stunned high school students in Sydney

Carrie Fisher says Ford will be bugged by affair confession

Carrie Fisher is sure Harrison Ford is annoyed at her

Dakota Fanning rekindles romance with childhood sweetheart

Dakota Fanning rekindles romance with ex

Jennifer Lawrence apologises to the people of Hawaii

Jennifer Lawrence sorry for 'offensive' story

Essential to get new Maroochydore CBD fundamentals right

LOOKING AHEAD: The central business district at Maroochydore is planned to be the heart of the Sunshine Coast.

SunCentral reports good progress on 53ha Sunshine Coast city heart

'Crucial' farm land eyed by defence department

Lawson Geddes moving the Brangus cattle to higher ground - which is the land the Defence Department is interested taking for the Shoalwater Bay expansion.

"You can't have one without the other.”

Former Shark Show for sale for $1.3 million

Vic Hislop at the old Shark Show.

TALK about a jaws-dropping real estate opportunity.

There's a whole lot of luxury in this home

The Endeavour Foundation's latest prize home in Mountain Creek.

WHEN it comes to desirable homes, it's hard to go past a prize home.

Ipswich City Properties asset portfolio retains its value

Ipswich City Council Administration Building, South Street, Ipswich. Photo: Claudia Baxter / The Queensland Times

New website launched by Ipswich City Council

Ready to SELL your property?

Post Your Ad Here!